China's Bubble Might Burst Next

[redqueen]

Bearish observers single out the twin trends of easy credit and rampant overbuilding - sound familiar?
By CHRIS TAYLOR, Reuters November 1, 2011 8:39 AM

(snip)

But recent numbers show some widening economic cracks: The Chinese stock market is near its twoyear low; third-quarter GDP growth slowed to 9.1 per cent, a continued deceleration after years of doubledigit gains; and the government's stockpiling of foreign-exchange reserves has been slowing to a crawl.

"Some of the leading indicators, including credit growth and property sales, have shown signs of weakness in recent months," says David Cui, a China strategist at Bank of America Merrill Lynch Global Research who was ranked first in Institutional Investor's 2011 All-China Survey.

"As a result, we believe the risk (of a slowdown) has risen considerably. Many of these risks are intertwined - which makes any outbreak anywhere dangerous."

(snip)

Bearish observers single out the twin trends of easy credit and rampant overbuilding - sound familiar? - that have led to "ghost cities," a blizzard of new developments and skyscrapers that have been erected and now lie virtually empty.

Surely that can't be sustainable. Some Chinese officials have talked smugly about having abolished the usual business cycle of boom and bust, after 30 years of impressive growth.

(major investment talk snippage)

Could China's bubble deflate slowly instead of popping like others did?

[subterranean]

1. A sure sign of a bubble about to burst

is when officials and business leaders of a country start saying that their situation is uniquely immune to the normal laws of economics: "This time is different." You hear that in every bubble, without fail. And inevitably, they are proven wrong.

[Richardo]

2. I totally agree

I remember thinking that in the heralded 'New Economy' of the 90's. Really? Profit doesn't matter anymore? How can that be? Answer: It couldn't.

[madrchsod]

5. china has already spent 568 billion dollars in their recovery in 2010

i doubt they have that kind of money to do it again. there`s a decrease in spending in the across the world for chinese products. they face pressure from india and other south east asia countries that have cheaper/child labor. china has problems that they have to address

[madrchsod]

3. might? it`s a matter of how soon...

[redqueen]

7. I'm trying to remember how long I was reading about the one here...

before it finally popped.

This one has been drawing concern from for over a year.

[Shagbark Hickory]

4. A lot of people sure do think so.

I've heard of a Chinese Businessman who is investing in the US rather than China because he thinks China is headed for big economic trouble.

[CoffeeCat]

6. That's interesting about China...

We've got a few more to topple before China does.

Have you seen the charts on Italy? They're next for sure.