China Unrest

It looks pretty certain that I will be traveling to China in May and the increasing unrest there has be a bit concerned. Not for my sake so much as for those in China. About 10 million migrant workers in the country have lost their jobs, commerial and residential real estate is vastly overbuilt and in a nose dive, exports have fallen off the map (as has imports), thousands of factories have closed and there is no quick fix in sight. Fortunately the country has a good reserve built up, but in times like these for a country its size, one has to question whether it is enough.

We in the U.S. are spoiled and have the benefit of a safe haven status. The worse things become, the more money seems to flow to us. And the more it will flow away from countries like China.

China officials themselves in a rare showing of frank discourse are admitting that unemployment there is increasing the odds of increasing social unrest. So much for that decoupling theory some were clinging to as late a last summer. It is global economy. It is a global recession.

http://news.bbc.co.uk/2/hi/business/7915372.stm

http://www.economist.com/finance/displaystory.cfm?story_id=10809267

Disclosures: None.