Like the Soviet Union in the 1970s, China is coming to the end of a long labor-force boom, and hoping that an orgy of investment will keep the old magic going while stabilizing its fraying frontiers. The success or failure of its Belt and Road projects — and the still greater sums it’s spending domestically — will determine whether the nation achieves its dream of prosperity or succumbs to the same forces that doomed the U.S.S.R.
But this "investment" isn't in areas designed to get more bang for the buck. It is for the purpose of bringing up poor inland regions of China that have been bypassed by the coastal export boom, as I note here.
There might actually be a reason those interior regions didn't boom, too.
So there will be a lot of wasted money spent by China--or at least money not effectively spent to make their economy more productive.
We'll see if these "reasonably enlightened" despots can pull this off.
Bonus TDR points for seeing the labor-force boom for what it is--and which is now coming to an end.
I don't see a USSR-style collapse even if there are strong parallels, simply because Russians were a smaller portion of the Soviet empire than Han Chinese are in the Chinese state. And China is far more productive and plugged into the world economy. But that said, it wouldn't shock me.
These are interesting times for China, I dare say.
