The housing frenzy has driven prices so high, so fast, that a crash on the scale of the real estate collapse in Japan in the 1990s is a virtual certainty. And China's already exaggerated official growth rate could take a pounding, all the way to the zone of the unthinkable, into the low single-digits. _FortuneChina's government gambled that the rest of the world -- particularly Europe and the US -- would recover within a few years, allowing the rich export markets to restore a healthy income flow to the empire. But in the case of Europe, this does not seem to be happening.
The global economy faces a depression-era collapse in demand if Europe doesn't quickly act to dramatically boost the size of its debt-crisis firewall, implement pro-growth policies and further integrate the euro zone, the head of the International Monetary Fund warned Monday. _FoxBusinessAnd if the US also fails to rebound from the extended economic downturn under President Obama, China's central and regional governments may be pressed for answers.
Although China emerged rapidly from the downturn of 2008-09, Edwards said the recovery had been the result of a massive reflationary package by the Chinese government. Beijing, he added, could not afford another big stimulus to offset a weakening of the economy. Falling imports have led to a widening of China's trade surplus, but Edwards said exports were set to slow and a trade deficit was looming.China's building spree and commodities-buying spree was a calculated risk. At this point, it appears that the strategy may not be sustainable.
He added that despite the recent run of more upbeat economic news from the United States, the risk of another recession in the world's biggest economy was "very high". _Guardian
More: Local governments and land grabs against ordinary citizens....
...if grabbing land is costly, risky, and threatens the regime, why is it so commonplace? Because neither the Communist Party honchos in Beijing, nor their local minions in Wukan and Kanwu, have a choice in the matter.
...The Party’s authority and legitimacy are predicated on guaranteeing at least 8 percent GDP growth a year, and economic growth is the mandate of all Party officials. If you’re Ningbo or Yantai or any large Chinese urban center with an entrepreneurial population and large resources then that’s not a problem. But if you’re a rural township of subsistence farmers then your best shot at producing the numbers you need to win praise and promotion is to grab that worthless land and put a factory or a condo on it. The magic of economic statistics is that, even if the factory or condo is empty, the value of land shoots up, and so does your career prospects.
Land grabbing is the Chinese equivalent of alchemy, and this quick immediate economic fix is just too addictive for local officials to say no to. This is a problem not just commonplace in the villages, but everywhere in China. _Diplomat