Comment on another Gordon Chang "China collapse" article

Gordon Chang has posted another "China collapse" article as we enter 2016. In the comment section, as expected, he was widely ridiculed and criticized, with numerous dismissals of his long history of inaccurate doomsday forecasting. I added my two cents: 

Specific refutations of Mr. Chang's same old arguments should be presented, not just blanket dismissals of his bad timing. I always take his line of attack seriously, because these are indeed the deep structural problems that China must either overcome or somehow muddle through, or that simply are being overridden by larger and wider global economic trends anyway.

The old "Li Keqiang index" of measures such as electricity consumption, rail freight, etc., are less indicative of the overall economy than they are of the manufacturing sector specifically; these should either be growing very slowly if at all, and should in some cases be in outright contraction, simply because of the huge backlog of overcapacity in heavy industries and increased productive efficiencies. Rail freight, for one, should be in steep decline simply because bulk shipments of coal and metal ores aren't needed where there's already excess supply buildups.

Consumption and services are already more than half the economy; they are unlikely to gain a much higher share in the next 4-5 years, i.e. anything approaching two-thirds or more of GDP as in advanced OECD economies, but then China's per capita GDP of $8,000 is only a fraction of the OECD average anyway. Besides, this half of the economy has until recently been substantially undercounted to begin with, and it could be that the growth rates aren't really quite so good as reported officially, but that a lot of activity is simply being recorded for the first time.

The fact that capital is leaving the country is mostly an indication that a new international monetary cycle has begun in which the best returns are elsewhere, not that China itself is crashing. Everyone knows the RMB is overvalued - no longer undervalued as other China-bashers continue to claim (Trump) - and should capital controls be fully and immediately relaxed, a 30-plus percent devaluation is likely, which will simply not be permitted by the global financier cartel. China is in fact doing Wall Street, the City, Washington and Brussels a big favor by keeping the yuan so strong. They'd all be screaming if the party were to loosen its grip and actually allowed democracy and true market freedom.

Which leads to the main point: it betrays a very archaic view of the global economy to speak of China as becoming "dominant" at the expense of the West and the US. China has its role in the world, just as the US has its role. Neither is necessarily diminished by the growth of the other. In the last quarter-century, it has precisely been China's rise as the global manufacturing hub that has, among other factors, dramatically boosted Wall Street's unrivaled stranglehold on the entire planet. It's true China will probably never catch up to the advanced countries in the most important respects, but that doesn't mean it can't become increasingly the central player in its own hemisphere - not least because the other dominant players have decided to co-opt it, not contain it.

My blog, http://chinatransition.blogspo..., seeks to address the recurring themes, while also laying out the historic context of the PRC's present situation.