Nouriel Roubini: China Economy at Risk of ‘Hard Landing’ After 2013

(Bloomberg) China’s economy is at risk of a “hard landing” after 2013 as efforts to spur growth through investment cause excess capacity, said Nouriel Roubini, the New York University professor who predicted the financial crisis.

“China is now relying increasingly not just on net exports but on fixed investment” which has climbed to about 50 percent of gross domestic product, Roubini said in Singapore today. “Down the line, you are going to have two problems: a massive non-performing loan problem in the banking system and a massive amount of overcapacity is going to lead to a hard landing.”

The nation faces a 60 percent chance of a banking crisis by mid-2013 in the aftermath of record lending and surging property prices, according to Fitch Ratings. A record $2.7 trillion of loans extended over two years has pushed property prices in China to all-time highs even as authorities set price ceilings, demanded higher deposits and limited second-home purchases.

China’s current challenge is to maintain growth and curb price gains ahead of a leadership change next year, Roubini said. Officials may use administrative steps and price controls as well as raising rates further and allowing currency appreciation if inflation becomes a bigger problem, he said. .............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-06-11/china-economy-at-risk-of-hard-landing-after-2013-nouriel-roubini-says.html

how they are going to resolve them will be very interesting.

That is how they will temporarily solve the problem.

So far their military expenditures are about 1/6 of the US even though their population is 4 times a large.

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

So when do they start outsourcing jobs to India and Vietnam?

both parties including our President: China is on an
uninterrupted trip straight to the top and will be
ruling the world economically.

Many of us with our feet on the ground questioned
this. China has her own problems and her economy
just like other economies will have its fits and
starts. It will have its ups and downs.

What happens in the Chinese economy effects ours as well. For instance, inflation is starting to take a toll in China's economy, and is now starting to effect ours as well.

The joys of a global economy.

they should put technocracy on the backburner and give communism another try.