Paper Dragons

China weathered the 2008 banking collapse with little apparent damage and was long admired for its rapid growth and financial steadiness. Walden Bello argues that the surface calm hides serious weaknesses. An overinflated property market, an unpredictable stock exchange, and a fast-expanding shadow banking system together threaten to set off the next major crash, one that could pull the global economy down with it.

Bello reviews the sequence of recent financial crises, beginning with the collapse of Japan's speculative bubble in 1990 and ending with the crisis on Wall Street in 2008. He examines the political and social costs of these episodes, including growing inequality and damage to the environment. He contends that China may be the location of the next collapse and that, under neoliberal economic policy, such collapses will keep recurring.

In Bello's view, breaking this pattern requires a basic reorganisation of how societies produce and work together. He proposes a move toward cooperative enterprises that protect the environment and dismantle the linked legacies of imperialism and capitalism.

The book is aimed at readers who want to understand how the financial system became so unstable and what could be done to prevent another global meltdown.