Wheezy, Conniving, and Generally Bad News

Harry S. Dent | Friday, October 25, 2013 >>

In past articles I’ve shown how China’s debt has grown much larger and much faster than other emerging countries.

It has vastly over built its infrastructures.

It has the greatest real-estate bubble in the world.

It’s moved from 38% to 53% urbanization in just 12 years. And now it’s moving even more rural people off their land and into the cities.

As if that’s not enough, let’s add the fact that it is – by far – the greatest polluter in the world and it’s propping up third-world dictatorships in emerging countries, especially in Africa.

Sounds like Darth Vader to me: Wheezy, conniving, and generally bad news.

After all, if there are going to be large geopolitical disasters in the world in the coming decade, or decades to follow, there are two places they’ll most likely occur:

In past articles I’ve shown how China’s debt has grown much larger and much faster than other emerging countries.

It has vastly over built its infrastructures.

It has the greatest real-estate bubble in the world.

It’s moved from 38% to 53% urbanization in just 12 years. And now it’s moving even more rural people off their land and into the cities.

As if that’s not enough, let’s add the fact that it is – by far – the greatest polluter in the world and it’s propping up third-world dictatorships in emerging countries, especially in Africa.

Sounds like Darth Vader to me: Wheezy, conniving, and generally bad news.

After all, if there are going to be large geopolitical disasters in the world in the coming decade, or decades to follow, there are two places they’ll most likely occur:

See larger image

Of the large economies that matter, China pollutes the most, then the U.S., and then Europe. Of the three, the latter has the smallest carbon footprint in the developed world, in part thanks to its higher energy prices, which lead to smaller cars, appliances, houses, you name it.

Since 2000, China has accounted for two thirds of CO2-emissions growth.

The U.S. and Europe are cutting their combined emissions by 60 million tons a year. China is increasing its by 500 million tons a year.

It’s just this simple: China’s unprecedented growth and urbanization is costing its citizens and the world dearly.

China is the Darth Vader of this era!

In January 2013 the air in Beijing hit a level of toxicity 40 times the level the World Health Organization deems safe.

China just had to shut down Harbin, a city of 11 million, because air toxicity was 50 times acceptable levels.

Many of the country’s industrial cities have a constant haze. In some places, it’s so bad you can’t see the sun.

In Northern China where the population is highest, air pollution takes 5.5 years off the average life span, almost like smoking cigarettes.

Half of China’s urban water supplies are unfit even to wash in, let alone drink. Rivers are turning brown and yellow, with fish floating belly-up. Rivers are vanishing from excess water withdrawals.

Four-fifths of the water is in the south of the country and half the population and two thirds of the farmland in the north, so the government is spending massive amounts of money to divert water to where it’s needed. Of course this engineering disrupts natural habitats on a large scale.

More people are starting to protest. The government’s response is to jail environmental activists and create a state monopoly over the judgment of environmental lawsuits.

However, the government can’t simply ignore the environmental threat any longer. The problem has reached catastrophic levels. So, the Chinese powers that be will spend $275 billion over the next five years to deal with air pollution alone.

The country has led the world in creating new solar and wind-power industries. But is that enough? The answer is clearly no!

And of course, in a corrupt, communistic system, local political leaders keep winning exceptions and lowered targets for their business cronies. That will only increase in a slowing economy ahead.

China’s strategy is like that of the West in the past: grow now, clean up later when you’re wealthier. The only problem with that is the world is much more polluted today and China’s population is already close to 1.4 billion people. That’s almost double that of North America and broader Europe combined!

All of this is to say: China looks to me to be the greatest economic disaster in the making. The next decade should see a major urban upset from over investment by a top-down communist government, which should once and for all prove that free market democracies are better after all!

Steer clear of investments that rely on Chinese support and tread carefully in commodity-based economies.

The ride ahead is going to be hair raising and dangerous.

Harry

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Categories: Economy

About Author

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.