Red Bubble, Double Trouble

The seemingly meteoric rise of China over the last three or so years has as much to do as the (over-advertised) 'collapse' of western capitalism as it has to do with China's apparent growth. Now, don't get Mr Eagle Eye wrong, statistics stating GDP growth of 8.48% during the economic shite-pit of 2009 are impressive. Suspiciously impressive, given that China's export-dominated economy could grow at that level whilst it's chief customer, the West, was choking on rising unemployment and debt. US public debt alone reached $7.8 trillon at the end of 2009, 54.6% of GDP (and that's moderate compared to it's total debt; $12.31 trillon, or a staggering 86.1% of GDP). And now that Barack Obama has gotten his way with Health Care reform, America's economy will only get sicker.

Yet, another tidbit has caught the attention of Mr Eagle Eye. Seemingly following in the footsteps of Dubai, China is gluttonsing in a decadent construction orgy, resulting in an ominous level of oversupply (as of late 2009 22.4% of Beijing's office buildings were vacant, with many more under construction). Mr Eagle Eye will say this now about property bubbles; they are the foreshadow of particularly nasty recessions. So it was in the USA, to the UK, Spain, and Dubai, so it will be in China. In spite of the tremendous architecture and design of China's skyscrapers, it's yet another historical repeat of the last days of Rome.

With social unrest already on the rise, in spite of the economic figures mentioned above, the ramifications of a popping property bubble could mark the start of something far more tumultous for China. Given that worldwide leaders from America, Europe, and emerging economies in Africa and the Pacific have come to be overdependant upon this fragile communist state, they will only have themselves to blame for the consequences of burying their heads in the construction sand. The West would do well to get off the Chinese band-wagon.