Broken China?
We recently read the following words of wisdom about the global imbalances:
“While China is stimulating its domestic consumption, the West is repairing its financial institutions by continued government stimuli. The recent interventions of free market forces by governments are contrary to the principle of free market capitalism. On one hand we preach free market competition and on the other hand support is given to the collapsing banks and financial institutions with huge sums of public money which is unfair to companies that manage affairs properly to survive in the market. Such governmental interventions are contradictory to the basic principles of a market economy. Free market movement of goods and labour is also ironically contradicted with incidents of protectionism, narrow national interests and restrictive regulation. Increasingly we are facing a barrage of unnecessary regulations that restrict human creativity and discourage entrepreneurship. In the post-financial crisis, world, regulatory regime will be further tightened for the financial sector resulting in the non availability of capitals for the SME sectors which are traditionally the creative part of the real economy. Speculation, in terms of property, stock market and the creation of credit accompanied with complicated financial products mystify even the bankers and financial experts, let alone laymen like us. The consumers who arc encouraged to live now and pay later are the last ingredients to this gigantic bubble that has finally burst in 2008 and 2009.
Are we going to have a double dip in 2010 or are we recovering from recession and returning to growth after the quantitative casing of government stimuli? How will the governments of the world pay for the trillions of dollars that are poured into the financial institutions to prevent it from collapsing? We cannot simply print money and forget about it.”
The interesting thing is that these words were not penned by a professional economist but rather by professor Fang Mei, a traditional and modern medical expert who went on to say :
“Using Chinese medicine diagnosis I suggested that in order to deal with the symptoms of deficiency, a physician needs to look at the root causes of this deficiency and stimulate the organs that the body will rely on for fundamental recovery rather than waste our energy on curing symptoms.
Following this train of thought I can foresee further crisis ahead until we give the patient the correct treatment. World economic recovery will be sluggish and there will be no clear direction until the real economy finds strength to create concrete wealth and jobs rather than capital speculation. Even at this moment, the world stock markets recovery is fuelled by the ‘saved’ banks speculating in the financial markets with injected public money. This is also true in China, increasing stock market value and property speculations are developing into a bubble that might cause the next financial crisis. We have not learned our lessons yet.”
Professor Mei’s medical wisdom is represented in Thailand through Acumedic (Asia) Co. Ltd. Whose which can be found at the new Bangkok Mediplex, 2/60 Soi Sukhumvit 42 (Kluaynamthai), Prakanong Sub-district, Klongtoey District, Bangkok.