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TMFAleph1 (95.05)

Why China Will Never Overtake the U.S.

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February 02, 2010 – Comments (3) | RELATED TICKERS: FXI , GE , GS

Okay, that's overstating Edward Chancellor's thesis. However, in this piece, the GMO strategist (author of 'Devil Take the Hindmost') outlines a genuine threat to China's rise to economic primacy. Worth the read!

3 Comments – Post Your Own

#1) On February 02, 2010 at 11:39 AM, kirkydu (95.29) wrote:

GMO, well worth registering for their site.

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#2) On February 02, 2010 at 11:51 AM, TMFAleph1 (95.05) wrote:

Indeed! I follow them very closely -- there are very few firms out there that have as firm a grasp on investing as GMO.

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#3) On February 02, 2010 at 12:33 PM, russiangambit (29.31) wrote:

I don't really buy that corruption alone can derail China. Corruption is like overhead cost, similar to European social net costs. Plus, Chinese are starting from a very low level, their labor is still very cheap, education levels are rising.

What could derail China  is big time deflation spiral in the US if it comes to pass. If US cannot finance its debt, it can longer inflate fast enough to overcome deflation powers. If China stops buying US debt then US goes down but then China too.

 

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