The video above offers a helpful summary of the challenges facing China’s economy, which is slowing after decades of rapid growth.
The challenges are real, but there’s a question as to whether China’s leadership under Xi Jinping is up to the task. Loosening the grips of the government is required, but Xi is going in the opposite direction.
Goodbye Las Vegas.
When one thinks about the world’s top gambling destinations, places like Vegas and Monaco would ordinarily come to mind. However, in the latest data received this week, as reported by Yahoo! Finance, Macau has once again shown growth that far outstrips the global gambling numbers.
David Ignatius is one of the more balanced commentators you’ll find, so when he write a piece stressing “warning signs” in China, it’s worth a read.
The government in China is trying to address the staggering amount of corruption, yet this effort seems to be having a destabilizing effect. Also, there are tons of bad loans in China and what appears to be a massive real estate bubble.
All of this spells trouble, and recent real estate sell-offs and bond sale cancellations have observers worried.
Despite gambling now being a worldwide craze, China and many countries in Asia continue to ban it in many places, as a result many tourists who head over to China now head over to Macau to let their hair down and go to a casino.
Due to gambling being illegal in most of China, many visitors decide to take a trip to Macau in order to enjoy some casino entertainment. Macau is now considered as serious competition to Las Vegas when it comes to attracting tourists who are interested in playing casino games.
The rise of China and its impact on economies all over the world isn’t a new story, but this overview in the New York Times is worth reading. The tone is one of looking at the downside of China’s economic empire and the unwillingness of desperate partners like European nations to assert themselves. But there is an upside, as China can provide much needed capital to struggling countries, and this also gives China a huge stake in stability around the world. There are certainly concerns on issues like the environment and human rights, but one needs to look at the big picture as well. Fortunately, President Obama’s foreign policy is aimed at engaging but also containing China, and he has been willing to use our own leverage in this relationship.
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