Re: Overpriced kit
for China a slowing economy has tended to mean growth dropping by a few percentage points to merely outstanding...
Assuming you believe the official figures - I don't. You noted the misallocation of capital - that's been on a gargantuan scale, probably more than enough to eat up all foreign asset reserves & ownership. At the moment China is in the "pretend everything is OK" period, but eventually SOMEBODY has to take the hit. Could be the banks, could be the wealthy, could be corporates - but normally, as in the last "global financial criss" it is ordinary workers and tax payers who bail out the incompetence and greed of the rich. That can be done through conventional bail outs, or inflation, but only time will tell if that's an option for China.
Even to achieve the officially reported levels of growth, China has on average borrowed an additional 32% of GDP every year for the past decade. Spare the money for a moment and consider that China consumed more cement in the three years 2011-2013 than the US did in the entire twentieth century. Infrastructure has always tended to be a poor financial investment, how much of that cement has been used to make concrete assets that will never pay off? And when mis-investment starts to show through, who will China borrow from to continue to make this pretence of unfeasible and steady growth?
I'd grant you a consumption boom driven by debt leaves the US and UK similarly exposed, but "everyone else does it" is not now, and never has been a sound strategy. From a tech point of view, the whole world has a problem if China has a problem, unfortunately, the only good news (and its a pretty paltry form of good) is that most of the misinvestment exposure in China is to Chinese owners. What will become of the tech supply chain if China experiences problems? And if the regime uses even more of the Communist jackboot to avoid social unrest and political change, what then for the US tech sector that is reliant upon China as a cheap, stable manufacturing base?