China's turmoil risks more than stock volatility. But how bad will it get? Please vote.

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Paul Krugman writes: “So, will China’s problems cause a global crisis? The good news is that the numbers, as I read them, don’t seem big enough. The bad news is that I could be wrong, because global contagion often seems to end up being worse than hard numbers say it should. And the worse news is that if China does deliver a bad shock to the rest of the world, we are remarkably unready to deal with the consequences.”

That pretty well sums up the big question for 2016 and beyond. The old order, a fast-growing China as the world’s workshop, is gone. Xi Jingping’s effort to turn China into a consumer-driven economy has gone off the rails. Contagion awaits (and Washington is the largest state trading partner with China) — but how bad? A few observers say, really bad.

I think one of the biggest problems is that the Communist Party doesn’t understand markets. Sure, we Americans often see the oligarchs game the markets to their advantage, but they still function, albeit with distortions. Markets require a degree of freedom that the Communist Party is afraid to grant.

What do you think?

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