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How China’s Phony Economy Fooled Obama

Posted By Daniel Greenfield On August 31, 2012 @ 1:39 pm In The Point | 7 Comments

The Ryugyong Hotel towers over the North Korean skyline, all 105 floors of it. It is impressive from a distance, but inside it’s empty. China doesn’t just have one Ryugyong Hotel, it has countless empty hotels and even empty cities.

Russia’s Potemkin Villages have been repeated on a massive scale in China where entire cities and malls stand empty. Obama has urged us on to more government projects to compete with China, but we have no hope of defeating the People’s Republic of China in the area of useless government funded construction. Nor should we be trying to… as a recent article in Foreign Policy tells us.

Could the same malady have struck Americans when it comes to China? The latest news from Beijing is indicative of Chinese weakness: a persistent slowdown of economic growth, a glut of unsold goods, rising bad bank loans, a bursting real estate bubble, and a vicious power struggle at the top, coupled with unending political scandals. Many factors that have powered China’s rise, such as the demographic dividend, disregard for the environment, supercheap labor, and virtually unlimited access to external markets, are either receding or disappearing.

The message is not that we should be trying to become more like China, but that we may already be too much like China.

China’s economic ills are far more deeply rooted: an overbearing state squandering capital and squeezing out the private sector, systemic inefficiency and lack of innovation, a rapacious ruling elite interested solely in self-enrichment and the perpetuation of its privileges, a woefully underdeveloped financial sector, and mounting ecological and demographic pressures.

During the Cold War, America was not trying to compete with the USSR by trying to be more like it, but was trying to be the best country that it could be.

Obama insists that we need to compete with China on socialist government projects. Democrats constantly point to China’s infrastructure investments. But what are China’s infrastructure investments really worth?

One of the longest bridges in northern China collapsed on Friday, just nine months after it opened

A nearly 330-foot-long section of a ramp of the eight-lane Yangmingtan Bridge in the city of Harbin dropped 100 feet to the ground. Four trucks plummeted with it, resulting in three deaths and five injuries.

The 9.6-mile bridge is one of three built over the Songhua River in that area in the past four years. China’s economic stimulus program in 2009 and 2010 helped the country avoid most of the effects of the global economic downturn, but involved incurring heavy debt to pay for the rapid construction of new bridges, highways and high-speed rail lines all over the country.

And it’s not unique.

Since 2007, China has experienced at least 18 bridge collapses resulting in 135 deaths and untold economic hardship

China’s economy is as hollow as its bridges. Obama’s insistence on imitating the People’s Republic of China would make our economy just as hollow.


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