Not saying his points are without merit or anything, but Gordon Chang is a well-known neocon writer. He regularly contributes to the Glenn Beck show.

http://en.wikipedia.org/wiki/Gordon_G._Chang

Many of his earlier apocalypse predictions didn't seem to take hold. Many journalists consider him a bit of a nutter.

Just saying.

This article is opinion (poorly) disguised as facts. For example:

Chinese technocrats, goaded by a multitude of analysts and foreign leaders, have known for years that they would have to diversify the economy—steer it away from investment and exports and toward consumption. Yet Wen, in office since 2003, has not made much of an effort to do so. His stimulus plan targets the creation of infrastructure and aims almost entirely to boost industrial capacity even further, which would only aggravate the unbalance of the Chinese economy.

Contrast that with actual facts:

China's domestic demand, as the government had long wished, has started to become more of a driving force for the country's economic growth than in the past.

Signs of a domestic consumption boost are apparent as people are spending more on domestic commodities, export falls, and the government plans for more consumption stimulus.

Data from the National Bureau of Statistics (NBS) last Wednesday showed that China's domestic consumption had maintained an upward trend since the beginning of the year. For example, China's retail sales rose 14.8 percent in April year on year. It was 0.1 percentage points higher than in March.

http://news.xinhuanet.com/english/2009-05/21/content_1141192...

Or maybe this:

Chinese Premier Wen Jiabao stressed the importance of promoting domestic consumption and independent research and development during a three-day inspection tour of the central Hunan Province, which ended Sunday.

http://english.china.com/zh_cn/business/economy/11021617/201...

A real analyst would write an article about why this policy is taking time to work properly, kinda like this one: http://seekingalpha.com/article/157568-ramping-up-china-s-do...

I agree with the conclusion, but I am not comfortable with the theory that China is falling because the export number is sinking. China had a worse time in last year particularly in export sector but it turns out to be OK. However, I do worry that the population surplus is going to dry out soon. Large part of "the China miracle" was based on the cheap labor. Once that is ran out, China has to establish a sustainable economy growing model like any other developed countries (IP driven).

This might be a stretch, but it seemed like some of the attitudes expressed in the article could be true of the US as well:

> “I don’t know anyone who believes in the party anymore,”

Tons of people don't believe that the US Gov't can do anything correctly or efficiently anymore, I believe it's a sentiment found among many people.

> This regime will not last long. Who knows you won’t be our next leader?

Mirrors an attitude that their leaders, like presidents, will change periodically and it's best not to bet on a single one point of view.

Now that I wrote this out it seems like a bit too much of a stretch.

"At the end of July last year, for instance, some thirty thousand steelworkers in the rust-belt province of Jilin fought with police and beat to death a top manager who had threatened large layoffs after a merger."

I live in Pittsburgh, so this comment immediately reminded me of this:

http://en.wikipedia.org/wiki/Homestead_Strike

People had to die on the way to getting some sane working conditions in this country. Perhaps Chinese workers are close to this point now?

I hope the article is correct. From what I hear of people who have lived there recently, China appears to be so full of bubbles it makes a fresh pint of Guinness cheese look positively flat.

The tragic thing is, if China does blow up, there will probably be tens of millions of people who will die in the process.

Interesting concepts, which echo some other analyses; but the author seems overly sure of himself. Of course, prophets of doom always look that way at the prophetic stage...then again his book on the 'coming collapse' has been out for 9 years.

I would have been more impressed if his ideas had been accompanied by statistics or graphs, rather than individual data points or reports of trends, whose significance is hard to evaluate.

Serious question - how can a non sophisticated investor bet against the chinese economy?

Just saying "in the Great Depression, the exporting countries had the hardest time adjusting to deteriorating economic conditions" fell flat for me.

Maybe it's because I've been studying for my macro final all day but I think a lot more economic depth would be in order to support his thesis.

His book 'The Coming Collapse of China' was published in 2001. That's almost 10 years ago and he's still chanting doom n gloom. Perhaps when he says 'The Coming' he means sometime in the next 150 years. Who knows.

China's extraordinary growth is because it's in the process of industrialization -- which, by definition, only happens once for a given country, and in which ideology does not have a very significant influence. Examples of industrializations of this sort include the Gilded Age in the US and the 1920s and 1930s in the USSR; contrary to what Chang expects, they don't go away once they're completed (but, since governments do not create them, they aren't endorsements for the government which conducts that industrialization; cf. Fernand Braudel's _A History of Civilizations_. For an extrapolation of the same character, but not in the context of economics and thus easier to recognize, see http://xkcd.com/605/).

Is China under its current regime stable over the long term? I don't think so. If the very guards in the prisons have no belief that the state will endure through their lifetimes, and their junior officers think nothing of complaining to foreigners about the incompetence of the civilian leadership, the state will probably not weather a strong internal challenge.

Do I think this challenge will come from a democratic opposition? Of course not. China is seeing a large amount of enthusiasm for the country and little enthusiasm for its government; in this circumstance, the most likely result is the overthrow of the Communist government in favor of a nationalist government of some sort (which will probably be enough of a headache for the rest of the world that we'll long for the good old days of the export-minded Communists). Expect a replay of the 1911 Revolution and the overthrow of the Qing; I wouldn't even rule out an era of "postmodern warlordism" in the interstitial period before the next government solidifies its power. It sounds silly, but China is a very large place, and asserting one's authority over the whole country -- especially after the collapse of a dysfunctional bureaucracy and/or a civil war -- is a non-trivial exercise.

I don't think the timeframe for this is particularly long, either, except by the standard of CEOs. I think most of HN's readers will see a breakup and new regime in China within their lifetimes; if I had to place a bet, I'd expect it to occur 40 years from now, give or take ten years -- that is, once the generation currently in their 20s and 30s ages into political power.

if this is true, what gets caught in the crossfire? i imagine a failing regime would attempt to create unity by identifying some external enemy. who? taiwan?

I was trying to talk to a group of residents, some young and a few elderly, about the Olympics. Nobody wanted to discuss the Games, which were dismissed as just another government-staged event. All they wanted to hear was news from the American campaign trail.

That doesn't sound like any Chinese I know. The Chinese I know are completely apathetic about politics, anyone's politics. They are concerned with their day to day lives and making money. As long as the government isn't too bad, they ignore it.

I think this piece is wishful thinking; the author is projecting his deep feelings about politics and democracy onto the Chinese public and I just don't see that as reflecting any kind of reality I've observed there.