China's economy recorded its slowest growth in five years at 9.0 per cent in the third quarter of 2008.The economic miracle of the pRC has been based on some very simple and unmiraculous realities - totalitarian brutality, combined with western capital, technology, and our demmand for cheap consumer goods with human rights optional..
The situation has looked increasingly dire in recent days with export-dependent factories closing and laying off thousands of workers, with warnings from industry heads of much worse to come. (1)
Now the western capital is drying up (or, more exactly, never existed in the first place) and consumers in the west suddnely wondering if they can afford another DVD player, the PRC s is faced with a problem - the prospect hundreds of thousands of newly unemployed people and not 'organic' infrastructure to absorb them.
The social consequence of this could be immense - for the PRC, it could be the start of social collapse, with the newly unemployed resorting to banditry. Or they could be recruited by organised crime syndicates (I mean the illegal ones, not the criminal gang that runs the country), which would internationalize the problem.
The absurdity is that it had been suggested the PRC's economic growth would drag the rest of the world out of recession. Don't bet on it. THeir economy is as reliant on the smoke and mirrors as ours.
1 - "China to invest $445bn in rail system," by unidentified correspondents in Beijing, published in THe Daily Telegraph, 25th of October, 2008. (http://www.news.com.au/dailytelegraph/story/0,22049,24551437-5001028,00.html)