Andy Xie, ex-Morgan Stanley economist, seems to be drawing similar conclusions as me when looking at the Chinese economy. Writing for China Century Weekly he made many similar statements to those I made in my 2011 Predictions post.
For example, I said the following:
“The Chinese are on the brink of two ugly things: massive asset inflation and the bursting of that bubble, and social unrest…I would also expect a conflict with the U.S. over its currency, the Yuan. The U.S. … in the form of Barack Obama, will pressure China on its currency. The Chinese will fight back to increase the fervor of nationalism there to distract from their own internal economic problems.”
My statement compares with Andy Xie’s statement:
“The most likely candidates to trigger the next global crisis are the US’s sovereign debt or China’s inflation. When one goes down first, the other can prolong its economic cycle. China may have won the last race. To win the next one, China must tackle its inflation problem, which is ultimately a political and structural issue, in 2011.”
Caveat for you: While comforting to be agreed with, the validity of Andy Xie’s and my intuitive process will be born out by reality.
Jason
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