Business columns: China can’t sustain its rapid growth

Gordon Chang
Foxnews.com

Is China breathing down our neck? said Gordon Chang. China passed Japan in the second quarter of 2010 to become the world’s second-largest economy, with its quarterly gross domestic product of $1.335 trillion inching past Japan’s $1.286 trillion. It’s only a matter of time, experts say, before China surges past the U.S. to become the world’s biggest economy. The experts are wrong.

“China, in reality, has reached high tide, and there are many reasons why it will start falling back.” Start with China’s “outsized growth” during this global recession, a feat made possible only by a $1.1 trillion government stimulus program. The resulting lending binge has created a massive housing bubble, yet Chinese developers keep right on building. A crash is “inevitable.” At the same time, a labor shortage looms as China’s working-age population shrinks, thanks to Beijing’s “audacious” one-child policy. Factor in “the world’s most degraded environment, staggering corruption, and an increasingly unhappy populace,” and it’s clear that China’s problems are too acute “to sustain its upward trajectory.”