A freelance journalist and counsel to an American law firm in China predicts the imminent implosion of the economy and government of the People’s Republic of China.
Chang (who has lived in China for nearly 20 years) argues that the economy of China can no longer withstand the internal and external pressures for change. The greatest problem is the scandalous state of the country’s State Owned Enterprises (SOEs). Because the Communist cadres force the Chinese economy to conform to their archaic and procrustean social theories, the SOEs stagnate from lack of competition and suck ruinous loans from the state-owned banks, which are needed to underwrite such failing enterprises as petrochemicals, cement, steel, and electronics. The banks continue to function only because the Chinese are the world’s most thrifty people, saving about 40 percent of their incomes in bank accounts. Should public confidence in the system eventually erode (a probability, Chang argues), massive bank failures will inevitably follow. Chang also believes that China’s entry into the World Trade Organization (WTO) will accelerate its economic decline: no longer will the SOEs have monopolies on key industries, and if China fails to adhere to its agreements, dire consequences will ensue from its trading partners. Chang also considers the possibility—perhaps probability—of a war with Taiwan, a conflict the mainland cannot win, he says, if it employs only conventional forces and weapons. The immense potential for loss of life (and face), and the destruction of mainland property will exert on the Communist government pressures that it cannot sustain. Political corruption—pervasive in the country—is yet another force that may eventually send into the streets the masses of protestors whom the government fears. Chang documents his work heavily (with about 75 pages of endnotes), and his arguments carry the weight of his considerable experience and study. But he is often repetitive, and a shorter format might have served his purposes more effectively.
Damning data and persuasive arguments that should set some Communist knees a-knocking.