Lurking behind the façade are frightening structural problems
For the first time in more than two years, car sales in China declined in April, recording 1.55 million units, down 0.25 percent over last year against a forecast by the industry of 10 percent annual growth for 2011.
China could be facing a production glut of as many as 10 million cars by the end of this year, according to some estimates, because of the overcapacity built into the system. That is more than the total car production of Japan in 2009. It is at one with massive overinvestment in real estate. The country may have a property bubble approaching 30 percent of its housing. By one reckoning, there are 64.5 million flats with no electricity hookups, meaning they are empty – enough housing to accommodate 200 million people.
China has made real and amazing progress over the last 30 years. But they started from a very low point, have far to go before they get old, and rely on the very sources of their economic problems for their political stability. So far, the people are being targeted by the regime to keep them down to avoid facing the need for real economic reforms that would lessen unrest among the people but threaten the political elites or political reforms (that would then allow economic reforms) that would end the political elites' privileged position in the economy and sole possession of political authority.
I'd advise Tom Friedman to avert his eyes. I don't think "reasonably enlightened" means what he thinks it means. What are reasonably frightened Chinese elites willing to do to maintain their authority and privileges?
