The real China story is not really about the Olympic or Tibet, but it is about China’s image. It is far more damaging and will last a long time. It is about the collapsing Chinese economy. The stock market is off 50%. Real estate in Shanghai is off 10%. In Shenzhen real estate prices have fallen an average of 28% and there are reports of falls of up to 50%. These have occurred since last fall! Far faster than anywhere in the world. The collapse of these markets will undoubtedly have an effect on the Chinese bad loan problem and its financial system. Can you say subprime in Chinese? The number of shoe factories in Guangdong has dropped 40% since 2002. Over 40% of Chinese textile factories are losing money. After the lunar New Year, 30% of the Guangdong migrant workers did not return. According to a survey of the American Chamber of Commerce in Shanghai, two thirds of the members thought China was losing its edge as a source for manufacturing and 17% were thinking of leaving. Of course we don’t really know what the real numbers are because the press is restricted. Markets are about choice. To make a good choice you need information. To get accurate and timely information you need free speech. Without information markets eventually collapse.

William Gamble
Author: Freedom: America’s Competitive Advantage in the Global Market
EMERGING MARKET STRATEGIES
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