Investor Gary Shilling is a China bear (like many others) and he just wrapped up a 5-part series for Bloomberg on why the country is zooming towards an inevitable hard landing.
In it he takes a wide-ranging look at the country, examining its growth strategy, its demographic problems, and its failures in economic planing.
We read through the piece, and plucked out the key points.
Thanks to the country's one-child policy (now relaxes), it's already running into demographic problems.
Another fact about Demographics: 'As the Chinese population ages, the ratio of retirees to working-age people is forecast to rise from 39 per cent last year to 46 per cent in 2025.'
Meanwhile, the government has uncovered a huge volume of bank loans that were illegally funneled into property investments
The latest HSBC PMI numbers show that economic growth is fading.
Passenger vehicle sales only grew 3% this April, compared with an annualized rate of 33% in 2010.
Money supply growth is only at 15%, down from 30% in 2009.
The country isn't likely to float the yuan anytime soon. Instead it's likely to double-down on exports, creating an even bigger excess capacity problem down the road.