Top 10 Dangers China Faces Today

Here are the top 10 dangers that China is currently facing:

Top 10 Dangers China is Facing

1. Massive Pollution – China is hands down the most polluted country in the world
2. Income Gap – How is it that some Chinese factory workers make less than $40 per month while their bosses and the rest of upper management drive BMWs?
3. Rampant Corruption - This is most serious on the local provincial level
4. Higher than Reported Unemployment – There are many areas of China with migrant workers with no job or source of income.
5. Lack of Social Safety Net – China is one of the most capitalist countries in the world, if not the most, in terms of its economic policies.
6. Quality of Education – China may well produce the most engineers in the world. The problem is a huge portion of them do not innovate & lack leadership ability. However, this is rapidly changing and Chinese professionals are much more hungry than their counterparts in the west.
7. Product Quality and Customer Service – The former will undoubtedly improve, as will the latter, but it will take Chinese companies quite a while to learn the true meaning of customer service.
8. Trust – Mistrust and the causes of mistrust are rampant in modern China
9. Over Dependence on the US – China’s economy is export driven, mainly by consumers outside of its own borders, which brings us to the last point:
10. The Imploding US (and later Chinese) Housing Bubble – When consumers have nothing left to spend, the whole world, nonetheless China, will be caught up in a quagmire of pain.

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1. 1|Jeremy says:
   

   Mike,

   It seems like the number that is typically quoted as the savings rate for the average Chinese person is 25% and not 40%. It is very high, however.

   I think there is a risk of a recession like we have not seen in many, many years, but it is not a sure thing. There are large structural problems in the US economy, and as the article you link to talks about, the US dollar does not deserve to be the world’s reserve currency at this point.

   Don’t say that too loud, though. It might get back to China or Japan, and then we’ll all be in trouble =)

2. 2|Jeremy says:
   

   Me too. The thing that is scary is that although most of the “experts” are on my side, most of the most well reasoned analysis points to much bigger, rather than smaller, problems to come.

   Nice source from the WSJ. It looks like I was well off, I just seem to recall reading 25% many times.

   The article also has the US national average savings rate at 2% (this is October of last year), whereas we all know it has turned negative this year.

   So scary things to come, perhaps.

3. 3|mike says:
   

   The American housing bubble is starting to burst. I fear it will take the world down with it in a type of economic crisis that has not been seen in generations. The economist magazine has been pushing Asia as the next engine of economic growth but thats just desperation and delusion talking, perhaps some propaganda as well. Asian cultures have a much lower rate of consumption than America, China in particular. Their savings rate is like .4 or something. India is a better hope since they are a democracy and their consumption rate from what I recall is only second to us, at .67 vs our .7*.

   * these numbers are from memory and a US news article i read like 6 months ago so they may not be 100% accurate.

   http://www.spiegel.de/international/0,1518,440054,00.html

4. 4|mike says:
   

   I guess finding reliable Chinese statistics is harder than finding drinkable tap water. I have seen the number as high 50%, but who really knows?

   http://online.wsj.com/article/SB113235786964901964.html

   I hope your optimism about the potential recession rings true.