On Monday, Gordon Chang, the author of The Coming Collapse of Chinaand regular contributor at Forbes.com, was interviewed on Yahoo’s Daily Ticker, where he observed, “If you look at all of [China’s] indicators, they all point down.”
Among those indicators were electricity consumption (flat), car sales (flat), property prices (collapsing), and industrial orders (down). And there is more to come, much more. The Chinese communist government is slowing the rate of growth of the money supply in order to “fight inflation,” the natural result of nearly 30 years of expanding that money supply in order to catapult the Chinese agrarian economy into the 21st century. And such slowing is having the same expected effect: As the economy slows down, bankruptcies increase, tax revenues decrease, and the economy slows down further.
Chang added, “We’ll see more obvious signs of deterioration in the Chinese economy over the next six months.” He noted that one of those signs is the increasing civil unrest including riots, bombings, and insurrections taking place across the country.