China, China of them all!

The latest incense burning at the Buddha altar is made of slow burning materials.
At least those are the wished from the latest economic actions at the crown of China. The Chinese crown wants to slow down everything, just a little. In the present days of high power speculation, this slow down can turn into a surprising strong sell-off in the basic materials and natural resources areas.
If that is to occur I see a little of chaos and panic from Chinese elites. This could turn out to be a well timed event to invest in natural resources. Specially, anything that is basic for consumers and manufacturing.
It will be a first when a government cooks up some economic formulation and turns out that it works as touted. The Chinese elites might have learned a few tricks from A. Greenspan but the lessons should be clear. In the US people live under debt service. Mortgaging people’s lives is a way of live.
Chinese are savers and want to retain their assets as any other individuals with assets. Moreover, as a Chinese it is shameful to have to resort to debt to engage yourself in hedonistic behavior. The Chinese government might intent something different to comply with economic whishes of other countries, but might need the army to stop the possible consequences, this time around it could be, the army will have to come to the streets not to fight students but to fight its middle class, if the slow down takes a sudden dip. Time will tell. In the mean time, the slow down will be similar to a dot.com event. Olympics are coming to China in 2008 and the whole budget impact will touch $10 Billion with a big B. Too much for an organized long term slow down. You cannot serve Olympics and economic slow down in the same plate the same years. Much less plausible is willingness to destroy the amount of equity float Chinese companies have in global markets. It might bleep, but “What’s the bleep.”