[__pThrow]

It seems as though China is undergoing a Keynesian expansion. So I'm probably wrong about that. I'm going to watch to see if I can figure out the difference between what they seem to trying to say is a problem due to massive government spending and Keynesism.

Or are they saying "too much" Keynesism is a bad thing?

Okay, these seem to be the main differences and concerns I am getting from this vid.

  1. Many loans eventually come via a shadow banking system
     and so are not transparent, ie, no one know how much is
     loaned and regulation is poor, this could lead to a
     huge credit crunch, and China's own too big to fail  
  2. Some large amount of housing is speculative in nature
     and kept empty as an investment and hence could be
     causing an enormous bubble
  3. This real estate bubble brings benefits to rich but
     doesn't improve the economy for the poor
  4. The boom has made the local authorities very rich and
     powerful (political corruption, crony capitalism, ...)
  5. The sheer size of it is unprecedented in modern
     financial history
  6. Citizens save too much (1/3rd of earnings). So economy
     is dangerously unbalanced, fueled by debt spending and
     not enough by consumer spending or shopping (41:10)
  7. Investment is 50% of economy, consumption 30%, so when
     investment slows down, it can't be replaced with 
     consumption. Credit is at a level of twice the size
     of the economy.
  8. State owned companies are filled with inefficiencies.
     "Shaking" them up would leave huge numbers of people
     unemployed.
  9. There is beginning to be a fear of collapse (that
     could lead to collapse.)
 10. Punk Rock pointing out corruption in the system
     and how the rich are getting richer.
 11. Hard to see further economic reform without political
     reform, yet it seems that Chinese are intent on
     not reforming their political system further.

Recommendations to balance economy:

  1. China needs to become more like us and consume more 
     themselves.