To Burst or Not to Burst

We all know that the real estate in the U.S. especially has taken a major beating, and before that Japan's as well. What happened was that the real estate bubbles in the two countries burst. In a real estate bubble, the people have a lot of excess money, so they invest it in real estate. Too many people invest, and the real estate market crashes. The price of people's homes go down, and they turn them over to the banks who sell them and further decrease their value. By then the bubble has already burst. With the current global economy steadily recovering, China's real estate market has grown quickly. However, many people are concerned that the looks of the Chinese real estate market mirror that of Japan's twenty years ago, right before crashed. 2008 already brought the Chinese real estate market startlingly close to a crash like Japan's, but the current state of ambiguous economy makes the future hard to read. The Chinese government, of course, recognizes the dangers and is making efforts to prevent a crash. But what's happening now is that, because of China's heavy reliance on the construction industry, more and more houses are being made that the investors cannot keep up with nor the government can stop. And if this truly does cause a burst similar to Japan's, the results could be catastrophic for the rest of the world which relies so heavily on China's consumer spending. Regardless, even if China's real estate market is on its deathbed, the government is well more equipped and forewarned than Japan or the United States were.

"When China Rules the World": Another Take on the Near Future

My most recent post was of Joel Kotkin's book about the U.S.'s place in the world in 2050. His projections are optimistic. They are also false, according to Martin Jacques's book, "When China Rules the World: The End of the Western World and the Birth of a New Global Order". A bold title, to be sure, but one that is equally as likely as Kotkin's vision of American dominance in 2050. Jacques has put up a convincing side backed by years of extensive research. The result is a belief that a nation can be powerful and rich without being democratic. Even if you disagree, it is undeniable that China is growing at an alarming rate for the now.

But whether this growth stays constant remains to be seen. For example, Kotkin's "The Next Hundred Million: America in 2050" brings up the point that America's population is constantly growing while other countries' are remaining steady. An increasing population, he says, is key to a strong economy in the long-run. This prompts us to ask, then, "What about China's population, which is consciously shrinking?" For the answer, we can look to Japan. Japan had the same overpopulation problem as China has more than twenty years ago. Their response to this problem was similar to China's and the population steadily declined. However, now Japan has a rather large elderly population in comparison to its work force and spends too much money on the previous generation's retirement and gains too little from its current youth's income. However, the difference between Japan and China is that Japan was already very wealthy at the time it began to decrease its population, while China, although economically strong, is relatively poor overall. Judging from this, China will have the same problem as Japan, just not enough money to pay for it, although all of this remains to be seen.

Nonetheless, if we ignore this possible outcome and go back to Jacques's book, China is more than ready to extend its influence to the rest of the world. It has a rapidly growing GDP and as quickly entered the exclusive group of world superpowers, but has somehow managed to resist the persistent "Westernization" that the rest of the world is feeling. It has made its own name its own way and will most likely continue to do so. So when China rules the world, Jacques foresees the reversing of Westernization (Easternization?). And in contrast to America's somewhat racially accepting policies, China has always been polite but high-minded. This adamant and maybe racist state of mind is what keeps the Chinese way from dissolving and may also be what will influence the rest of the world if it does indeed rise to the top.

"The Next Hundred Million: America in 2050"

That is the title of Joel Kotkin's futurist book detailing what life will be like in 40 years. Judging by the current census population growth rate, it is estimated that by 2050 the American population will have increased to 400 million, hence the title of the book. A strong and growing population, Kotkin theorizes, is the key to a nations success. While other developed countries have relatively stagnant populations, the U.S.'s continue to grow. According to Kotkin, that is one of the major influences on America's future. And what an optimistic future it is. Kotkin writes that by 2050, America will be ecofriendly and free of racism. This book is a rare find in the piles of declinist writings that have followed the 2008 economic crash. Many think that America's golden days are long lost and China and India are on the rise, but not Kotkin. Most people think America is sliding downwards, not Kotkin. He believes it is the other countries in Europe and Asia that are on the decline because of their stagnant populations. I noticed that this would specifically apply to China because of its efforts to reduce the population. Perhaps America will not rise again to become the wealthy, dominating giant it once was, but judging from Joel Kotkin's latest book, the U.S. at least has a better future to look foward to.

New "Red Dawn" Movie Underlines Communist Fears

One of MGM's upcoming films, a remake of the 1984 movie "Red Dawn" has stirred up the Chinese press in an indignant fury. The original film is about a Soviet invasion on America. However, this remake chooses to depict a Chinese invasion to capture the growing resentment that Americans feel towards China. The original film was probably an accurate description of the average American's fear of Soviet attack, and it was probably regarded as a joke in Russia anyways, since Communism was collapsing at the time. But China and America arn't even enemies (perhaps economically, but definitely not militaryly, as depicted in the film). I don't want to jump to conclusions in saying that MGM is racist, but it's unsettling how China, of all the countries the U.S. is likely to go to war with, is depicted as the savage, Communist bad-guys. Not only that, but from what we can gleam from the trailers, the Chinese forces are seen to be allied with Nazis. And as if to add insult to injury, the films main Chinese antagonist is played by a Korean actor. This movie boldly summarizes the anti-sino inclination of the American media and the fantasy of the typical paranoid redneck.