Fox News
Expand
Browse All Video
Watch Live

You're watching...

Is China Headed for Some Rough Times?

Details

  • Description

    Is there a coming collapse in China?

  • Duration 5:07
  • Date

Clips

Also in this playlist...

Editor's Picks

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

Welcome back to -- country Gordon Chang is with us -- you've probably seen him on Fox News Fox Business news now you're seeing a kind of country we want to ask you Gordon.

Everybody every article you pick -- says China it's the world belongs to China.

China's going to be the strongest economy China's gonna have the strongest military China's gonna in Europe -- they bail it out.

-- somebody who's written a book.

Absolutely -- -- -- direction and you think China is headed for some really rough time -- you've written a book the coming collapse of China.

Why do you come to a completely different conclusion that China.

Well everyone says that China is gonna take over the world because of its economy you know -- International Monetary Fund said the China would have the world's largest economy.

By 20165.

Years from now.

But something happened in September and that is after 35 years and almost uninterrupted growth the Chinese economy hit an inflection point.

And from October and November we saw -- real signs of contraction of the economy not just slow growth and contraction.

We saw collapsing property prices industrial orders just halted.

We've seen very flat electricity consumption car sales all sorts of important indicators and right now.

People in China are really really worried and that's why we see a lot of money coming out -- -- explained transfers the wheels are coming off the Chinese economy and that.

Has really been why people said that we were gonna take over they weren't there -- But -- we're heavy -- the Chinese economy weathered.

The -- the world economic downturn in 200820092010.

Why now.

Well what they did in 20082009.

To avoid the symptoms of the downturn they put too much money into their economy.

You know we complain about our stimulus programs well -- were so much bigger so for instance in 2009.

China pumped about one point one trillion into -- then four point three trillion dollar economy that's an incredible amount of money almost 25%.

So yes they created growth.

But they also created some dislocations that they're now trying to have to deal with and one of them -- inflation and the other of the property bubble.

And the property bubbles across China are now collapsing.

And that's can bring down the entire Chinese economy.

And that's why we -- all of these factory closures and we see these workers on the streets protesting not only around Hong Kong the Pearl River Delta but all the way up to Shanghai -- -- river delta.

This export -- now is in real serious trouble we've seen factories close as their owners flee because they can't pay their debts we see factory owners taking their own lives.

As I mentioned workers are hitting the streets and so this really means that China which looked invulnerable about three or four months ago.

Now looks actually very very fragile so what happens next.

Gonna keep putting money at a stand -- I pick and there are two are -- -- they're gonna do -- to charge through it but it's only gonna work for maybe a year and a half.

Two years and most.

Because they've now got banks which have all these questionable loans on their books.

They've built all the ghost cities that they -- I can hat I mean how can you build another ghost city.

Well yes they can do it.

But eventually it catches up to them.

They're not really avoiding the problems they're postponing them.

And they're making them bigger which means that they're more difficult to solve and that's why -- been much easier in 20082009.

For them to take their medicine.

They didn't graduated so now they've got intractable problems they're gonna try the same strategy which the Japanese did by the way after their bubble.

And it didn't work out for them either so essentially.

This is a real problem.

And if they get a hold serve the reason that they justify their existence the leadership.

Is to say look at the economic miracle that we've created keep us -- power the system works the continual delivery of prosperity and when one possibility what happens of prosperity isn't delivered.

Well the Communist Party has only other one basis of legitimacy and that's nationalism.

And that means the Chinese Government is gonna become much more hostile -- belligerent it's really been bad since the end of 2009.

And -- it's going to probably get worse than we've seen evidence of this for instance this week we saw the Chinese fishermen killed the South Korea and coast Guardsmen.

We've seen sort of this buildup of forces in the Indian border.

You know they're saying all these belligerent I think that's.

I guess that could attack ahead of China's navy prepare for war that's how could prepare for -- -- said -- two weeks ago.

This is this is not just saw -- sort of like you should modernize this is get ready for war.

And this comes in the context of Chinese flag officers and senior colonels in 2009 talking about waging war in the United States perhaps in a five year time frame.

So this is something that we need to sort of get our minds around because we're always saying you know word.

Chinese are not adversaries or our friends who want to work Wofford and our fans but all the time you know the Chinese talk about a zero sum game where they win we lose they talk about waging war on us -- At the Chinese military how to -- things that -- So Chinese tanks.

We need to understand the way they view us because they -- wasn't a very different way than we view them.

Load More