“China’s Iceland Moment”

Evan Osnos has a short piece here about the panic inspired by Chinese companies and individuals going on buying sprees around the world- comparing it to the Japanese economy of the 90s, he suggests that the rise of the Chinese economy will also be impermanent:

I couldn’t help but think about that moment this week when the world hyperventilated over the news that a man named Huang Nubo, a Chinese real-estate tycoon and weekend mountaineer, plans to buy seventy-five thousand acres of Iceland. He says he wants to build an eco-resort, but people in Reykjavik—still trying to disown their own mad boom and bust—can’t help but see specters lurking: a Chinese government plot to access the Arctic, perhaps, for the days when melting poles free up new resources? Or a water-play for glacial run-off?

Last week, it was Los Angeles’s turn, when news surfaced that state-backed Chinese investors have joined a $1.2 billion bid for the Los Angeles Dodgers. “We don’t want to be xenophobic here,” the Wall Street Journal responded, “but the Chinese are coming for our professional baseball teams.”

There comes a moment in every economic boom—whether it was the Texas oil boom in the seventies or Japan’s surge in the eighties or the Silicon Valley bubble of the nineties—when things get a bit weird. In retrospect, people like to point out that signs of overreach were always there, but of course they aren’t until they are. It’s hard to know how China’s Iceland moment will look someday: Will it be simply a quirky milestone on the continued ascent? Or will we look back on the last days of summer, 2011, as the moment when the ball reached the apex of its arc and paused, weightless for a moment, before beginning its fall?

I don’t know about this summer being the end of the golden age here- but saying that it might end over the next few years seems like a much safer bet to me.


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