Why did God create stock analysts ? To make weather forecasters look good says Dan Harris at China Law Blog. China Stock Market I normally don’t comment on economic news. I leave that to the pros like China Law Blog, Due Diligence China and the others in my blogroll. Mine is a simple site where I hope you learn more about the Middle kingdom obliquely, through my ordinary and extraordinary experiences. Besides that, I am just a poor teacher with stories whose knowledge of is limited to saving enough money to treat my DVD addiction and park at Starbucks once in a while. So, here is my two B’s worth on the recent stock market slide: I was having dinner in the countryside with a couple of 20+ year China expats who own a factory in China right about the time the Chinese stock market “corrected itself.” Man, I must have lost 5-6 bucks in that 9% fall. Hey, I told you: we teachers don’t have much to invest. Interestingly enough, the two men, at that moment, were talking about the coming collapse of the market. They certainly view this burp/hiccup as a an early sighting of the four horseman of China’s financial apocalypse. They see Shanghai as a propped up and desperately polluted credit bubble-economy build less solidly than a proverbial house of cards.* Diligence China says “Don’t do something, just Stand there!” while others claim the end is near. The writer at The Conspiracy to Keep You Poor and Stupid says Al Gore did it.

I belong to the “keep a refundable plane ticket handy because huge change is coming, but what me really worry” school of expat thinking. My dinner crew is packing up to head for South America to buy up sugar cane reserves to capitalize on coming industrial starvation diets due for some countries when the oil crisis becomes insurmountable.

Here is what I do know: China lacks competent middle and upper management and the schools preparing the new ones are doing a mediocre job at best. I know, I have worked at several schools that graduate BBS, MBA, MPA and DBA students. Some, like mine, are waking up to the need for new cirriculum design and market savvy teachers. It has been easy for China to keep growing because it has the cheapest lemonade stand on World Trade Avenue, but will now need marketing acumen they have not learned because they have been busy counting cash. I liken them to my teacher friend who has been here four years and has to wave a taxi driver to the rightor left because he is too lazy to learn the language: He is in for a shock when white faces are a less valuable commodity in this educational community.

Increases in labor costs, tightening of the housing markets, an artificially inflated market with too much American capital in reserve, yuan revaluations, still unbridled corruption, rising middle class unemployment, growing social unrest, WTO pressures, intellectual property rights and the government’s poorly thought out public speculations are a small part of why the economic outlook truly is darker than the Pearl River in Guangzhou.

I don’t claim clairvoyance like the author of The Coming Collapse of China, but I can sense a coming change of social and economic weather. Be it earthquake or famine I am in this for the long haul. I suppose I am of a new, but less idealistic breed of, useful idiot. I am here to help as I can, but, I have no illusions, as many did during post-Maoist China, that reform is coming or that this is a superior social construct. I am just a teacher who would like nothing more than to see the lives of some of my rural students, who know and care little about politics and governments, improved by my efforts.

Had I money to invest I, like my friends, would not be standing idly by. I would instead be researching the market for a safer home. I think the Chinese equivalent of the dot com bust is just around the corner.

By Lonnie Hodge @ OMBW 

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