Economist Paul Krugman probably ranks among the biggest China bashers among well-known economists. His latest article http://www.nytimes.com/2011/12/19/opinion/krugman-will-china-break.html?_r=1&emc=eta1 continues to fuel the usual misperceptions about China. First he claims that Chinese consumption still remains too low at 35%. He fails to mention, however, that low consumption is normal for countries that successfully transition from an agricultural economy to an industrial one because capital earns a greater share of national income. He also conveniently ignores the fact that China’s per capita consumption growth this past decade is the fastest ever recorded by any nation. The real per capita consumption growth actually accelerated to 10% per year.
He also claims that China has a real estate bubble Continue reading