While Hong Kong was over capitalized, the "new" China runs the risk of bringing down Russia in a financial collapse. America could see a run on deposits?
"Let's dispense with the suspense: Yes, China very likely will. And the outcome will have far more serious global implications than Krugman's main worry, which focuses on the chances of stagnation in Europe.
China's "severely under-capitalized financial system," "imbalanced growth" and chronic "overcapacity" all remind Merrill Lynch analysts Naoki Kamiyama and David Cui of Japan in 1992, when its bubble troubles first began to paralyze the economy. China is even more reliant on exports than Japan was in the 1990s, and its all-important property market now "may be tipping over."
China's "severely under-capitalized financial system," "imbalanced growth" and chronic "overcapacity" all remind Merrill Lynch analysts Naoki Kamiyama and David Cui of Japan in 1992, when its bubble troubles first began to paralyze the economy. China is even more reliant on exports than Japan was in the 1990s, and its all-important property market now "may be tipping over."