China’s enormous, strenuously obfuscated, probably much larger than even imagined credit bubble has led to flagrant misallocation of capital, spectacular malinvestments that have been picturesquely eternalized in vast and exuberant ghost cities, and a host of other nefarious side effects.
That this will end someday is clear. When it will end is not. And how it will end isn’t clear either. The spectrum ranges from a fiery all-encompassing crash followed by social upheaval to a soft landing or no landing at all. Somewhere between the middle and the optimistic end of the spectrum is the dreaded “hard landing.”
Alas, it shall not exist, Beijing decreed. In its infinite wisdom, “Beijing’s central propaganda department has instructed mainland media organizations not to give air time or column inches to foreign bank economists worried about the dangers posed by China’s ballooning debt levels,” the South China Morning Post reported. “As a crisis prevention measure, that’s like thinking you can eliminate the threat of a fire by disabling your alarm.”
But here is what a “hard landing” might look like: rough but not fatal.
How they will manage a hard landing by pretending the turbulence, cross winds, and downdrafts don’t exist is still a mystery.
So note the complex situation caused by crosswind, turbulence, and sudden downdrafts before the touchdown, the bounces and terrifying moments. Watch the landing gear. It’s unclear if China’s landing gear can take these shocks and will hold up this well, and if its pilots are able to keep control over their plane.