A child poses for photos with a Chinese national flag near the Great Hall of the People in Beijing. Goldman partner Roy Smith sees problems for China such as the burden of an ageing population, with mounting pension and health-care costs. Photo: AP
Forecasts for China to surpass the US as the world’s main economic power are misplaced. So says an observer who foresaw Japan’s eventual demise a year before its land-price bubble began to burst.
“The vulnerabilities in China today are very similar to the vulnerabilities in Japan,” said Roy Smith, 76, who was a Goldman Sachs partner when he wrote a column saying Japan’s rise as a financial hegemon was finished. “Nobody agrees with me. But they didn’t agree with me in 1990, so at least I have one right.”
Bad loans, overpriced stocks and a frothy property market are flashing danger for China’s economy and putting pressure…
View original post 642 more words