A China Bubble Burst by 2009?
Some of the effects of an economic crash in China might be:
- Massive unrest if widespread unemployment were the result, threatening the stability of the communist government, which is already struggling to maintain control.
- If China were no longer perceived as a safe place to do business, short-term higher prices for goods could result... and could open up opportunities for China's global competitors. Long term, prices could fall once unrest settled down and if China were aggressive in getting back in the game.
- A drop in China's consumption of oil, leading to lower prices on the world oil market -- perhaps even a crash. Good news for Western consumers; bad news for oil-producing countries (especially those in the volatile Mideast), which are currently enjoying the revenues generated by high oil prices.