It's always interesting to focus on China and I definitely do not disagree with the article. However based on the subject, what is happening in China is also happening elsewhere; especially in the West. I think it's also important to look in the mirror and get our own house in order first.
Right, corruption is a global pandemic. Who can say how much the bids are rigged in awarding US military-industrial contracts (funded both by US taxpayers and global dollar-demand), to say nothing of state and local gov contracts (eg NYC paying $632m for a 911 phone system upgrade[1]). And wall street fleecing everyone else, as usual.[2]
The article makes some very insightful points, but I'm not convinced that Chinese SOEs are more evil than any other centers of power (just one manifestion of growing inequality). One casualty overlooked here are Chinese SMEs: "The real problem is the limited presence of other financial intermediaries and the rudimentary nature of bond and equity markets, both of which poorly serve the needs of small private companies and local governments."[3],[4]
The author is right about deflation as the sandtrap up ahead, but that's just the consequence of a decelerating economy and we're still to see how soft/hard China lands. In doing a root cause analysis, one can chase down endless trails corruption. But if you want to find a problem which can be solved with a technological solution (as opposed to a social solution), it comes down to a distinct lack of progress in energy tech. Productivity gains in IT just haven't been enough to offset the rising cost of energy (as argued by Peter Thiel)[5]. Sure, the rising cost of energy is tempered a bit during deflationary cycles. But its a lose-lose, because so is economic growth (harmed both by too much inflation and deflation).
It's easier to see what's wrong in a particularly egregious example (savings rates approaching 50%!!!) and then later examine what parallels you can find in your own (assuming you're not Chinese) culture.
