Gordon Chang speaks again, should we even care?

Source:Global Times Published: 2015-5-27 23:53:01

Gordon G. Chang, a Chinese-American lawyer and author who is considered by some as a "China expert," wrote Monday on Forbes.com that China's measures to deal with economic slowdown will at best buy it "a year of debt-fueled growth" if they succeed but if they fail, "almost any dark scenario could occur, perhaps by the fourth quarter of this year."

Chang was best known for his book The Coming Collapse of China in 2001. He used to work in Citibank in Hong Kong and Shanghai and the Crédit Agricole Corporate and Investment Bank, but lacks economic training. Bearish about the Chinese economy, Chang often makes false projections about China's collapse and without any apology he would then come up with another drastic projection. This makes him a quite controversial figure.

US mainstream society always pardons Chang's failed projections for its stance and values. But in China's academia and media circles people neither like Chang nor understand why his absurd words circulate throughout US mainstream media.

Chang asserted that China now sees a second round of 4-trillion stimulus plan. To his mind, the allocation of 1.13 trillion yuan ($185.8 billion) for upgrading Internet infrastructure and the creation of a 124.3 billion yuan fund for affordable housing that China announced last week is another stimulus package that will be as large in scale as the one in 2008.

An important cause for economic bubbles is that economic activities correspond to false demands, which is proved to exist in most market economies. However, is China's new investment plan a gamble regardless of bubbles? Updating infrastructure is not a false demand. As an Internet power, China must develop its Internet infrastructure and this is not an auxiliary quantitative easing project. Even if some bubbles appear, they are not destructive.

The Chinese government's new investment plan sets a clear direction for supporting innovation and is not a temporary step taken for the sake of investment under the pressure of an economic downturn. A combination of reform and expanded investment has become the consensus in Chinese government and society.

Many Chinese experts believe that Chang holds a biased view toward China and brings it into his research and comments. With his obvious ideological and emotional tendency, Chang always gathers evidence to prove his predetermined conclusion instead of drawing a conclusion based on massive studies. His approach guarantees a 100 percent chance of drawing a false conclusion.

Chang has such poor credibility that many Chinese netizens joked that their concerns were gone when Chang again projected China's collapse next year. Whimsical predictions merely play with public opinion.

Posted in: Observer

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