The Maglev Train Model | A Symbol Of China’s Economic Decline?

Sheer speed at 270 MPH, no rocking, no rattling, in fact no sound at all, the Maglev is a show of engineering genius.  The train has no wheels which eliminates friction and therefore provides an ultra smooth and quiet ride at breakneck speeds.  The train is propelled along a track through an electromagnetic pull.  Construction began in March 2001, and on the 1st of January 2004 it began its public service.   The total cost to construct the line from Shanghai to the Pundong International Airport, was a mere $1.33 billion.  The Maglev project is the epitome of economy, which in the past, has been able to generate an income stream which allowed it to experiment in extraordinarily expensive ways.    However, since the 2008 Summer Games, China’s economy has matured significantly.  The costs of experimental technology is beginning to spill over into higher inflation, total debt as a share of GDP is rising fast.  An economy with more than 1.2 billion citizens, which had been experiencing double digit growth for more than a decade, is slowing.  One must wonder, is China approaching a tipping point?

How China Got There.

China boomed the old fashion way, by building roads to connect factories to ports, by developing telecommunication networks to connect business to business, and by enabling underemployed peasants to work in better jobs at urban factories.   The political ambition was to promote growth, and seemed to ease from it’s Communism idealogy.   China’s Highway network with its 46,000 miles is second in the World only to the United States’ 62,000 miles.

Demographic Shifts are Occurring.

The demographic trend is changing from a young income earning worker to a class of pensioners which will soon work it’s decaying effect on growth.  It’s exports which have powered Chinese growth for so long have slowed and will continue to do so as the West (most notably the United States) struggles with its debts.

On the Verge of a Slowdown.

China is on the verge of a natural slowdown, which could change the global balance of power, from finance to politics.  As a result of this slowdown, the millions of investors and companies betting on Chinese double digit growth, could be wiped out.  The big picture is, even with slower growth, at say 6 % (The United States is projecting its own growth at a paltry 1.7-2% by the way) it will impact China like a recession.  If an economy worth around $6 Trillion a year, which is heavily relied upon by the western world, slows its growth by 2-3% it will indeed send a shock wave felt throughout the entire globe.

Symbolic Meaning of the Maglev Bullet Train.

So the Maglev has long been a symbol of great engineering mastery.  Great Britain had ran one from 1984-1995, Germany pondered one for Berlin, and Japan has just started a project connecting Tokyo, Nagoya, and Osaka.  Great Britain and Germany both gave up the projects up for cost reasons.  China has not and doesn’t plan to expand the Shanghai to the Pundong International Airport route due to cost reasons.  So this justifies the question, is this a sign of excess, a tipping point per say?  Maybe much of the last decade expansion was an effort to present to the world, through the scope of the  2008 Olympic games, a China that had “evolved’ to capture world domination.  If so, perhaps its lack of GDP growth since the 2008 Olympic Games, may have China and the World second guessing its path to world domination, and the Maglev is the sign of the tipping point.

Save More Money in 2018

Coins 1523383 1920

Subscribe and join the worldwide 52-week money challenge! Get the tools you need right to your inbox.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

Share this post:

Recent Posts

Leave a Comment


What’s the Best Free Recipe App?

The Apple Store and Google Play together offer more digital cookbooks than you probably have room for on your mobile device. So which... more →
New tax law might slow down housing market.

What Will the New Tax Law Do to the Housing Market?

The new tax law will have a profound impact on the housing market, although in ways that go beyond the deductibility of mortgage interest... more →

4 in 5 Households Will Get a Tax Cut in 2018

Four out of five U.S. households will get a tax cut as a result of the legislation that President Donald Trump signed into law today. more →
Will bitcoin reach $100,000?

When Will Bitcoin Reach $100,000?

Bitcoin has accelerated its pace of appreciation in recent months, and if the current levels between $15,000 and $19,000 make you itch... more →
The Dow Jones topped 24,000 -- now what?

The Dow Jones Crossed the 24,000 Threshold. Now What?

Stocks appear to be increasing in volatility, yet the markets closed on Monday, December 4 with the Dow Jones Industrial Average is... more →
Peer mortgage

Should You Get a Peer-to-Peer Mortgage?

If you can’t get approved for a home loan from a bank, you might want to look into applying for a peer-to-peer mortgage. more →
Investment gifting is awesome.

4 Things To Know Before You Donate an Investment

While donations of any kind are appreciated, gifting investments benefits both the giver and the receiver. Here are four key things... more →
Are you wondering: What's the Relationship Between the Stock Market and Federal Debt?

What’s the Relationship Between the Stock Market and Federal Debt?

Wouldn’t it be wonderful if gains in the stock market could actually reduce U.S. government indebtedness? If that were true,... more →

How Long Can You Go Over Your Oil Change?

One the long list of things that can go wrong with your car, changing your oil after the recommended period can fall to the bottom.... more →