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I wouldn't hold my breath on the bubble being wiped out.

One of the ways that the party has been able to keep control over the country has been to allow liberalization  while the old party elites retain control over assets.  Yesterdays communists become today's capitalist elite.  Dynastic cycle complete.......

Moreover, one of the secrets of the Chinese "miracle" has been that most of the reflationary spending since 2008 has come from local, rather than the national, government.  The principle source of income for local governments in China?  Land sales......

This all comes at the same time as massive wage inflation is hitting. Wages in Guangdong have nearly doubled since 2009......

The knock on effects of this are disastrous not only for China, but for the developing world.  Without Chinese demand, commodity prices are going to collapse.  Look at what happened to oil prices during the 1997-1998 Asian economic crises....  If this happens again, the good times in Africa are going to be coming to a close.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Jun 21st, 2013 at 04:48:01 AM EST
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