China’s economic miracle has been fueled almost totally by its property and financial sector. Is this a problem? Recent developments suggest that the low hanging fruits have already been exhausted. Bitterness follows. The optimist will say that these are minor issues which can be settled with small tweaks in the system. Princeton University’s Prof Cheng Xiaonong doesn’t think so. He believes that years of denial and addiction to painkillers has allowed a cancer to grow and there is now no cure, no escape from collapse.
There is much that other countries can learn from the situation in China now, especially those that are trying to emulate China’s economic miracle.
Prof Cheng was former Chinese PM Zhao Ziyang’s economic adviser. He was on sabbatical in Germany during the 1989 Tiananmen protest. The authorities ordered him to return to China and testify against his boss. Cheng refused and had been living in exile ever since.