Thomas PM Barnett makes good sense, as usual:
Japan’s rise and decline should serve as a grim warning to China right now.
Good sense from Michael Auslin in The American:
Just like today with China, pundits, investors, and the media largely proclaimed that the Japanese party would go on forever. Today, the sophisticated management of the Chinese government is offered as proof that China will always experience growth (or if contraction, a soft landing). Back in the 1980s, Japanese companies were assumed to have discovered the secret to hyper-efficient production and thus endless profits, while the country’s bureaucrats were lauded as perfect macro-planners. Inefficiencies, protected industries, poor management, and a sclerotic bureaucracy were all ignored by those who wanted to believe the hype. Yet such weaknesses were exacerbated by a culture of excess that destroyed consumer reality. Once it took root in Japan, expectations changed permanently and traditional restraint was abandoned. The savings rate dropped, and people paid exorbitant amounts for new houses and cars. I remember watching as whole parties in Tokyo restaurants walked away from tables full of food that was ordered and then left to be thrown away. The economics fed and then followed the social disease. Eventually, the asset bubble burst and the whole edifice came crashing down.
Strategist Andy Busch of BMO Capital Markets provides some interesting insights on the situation in North Korea:
Here are several great charts from Wachovia looking at the Chinese economy in an effort to determine if the nation is experiencing a lending bubble. The firm doesn’t think so — at least not yet — but given government influence in its capital allocation system and the need to keep growth high in a weak global economy, I have to wonder.