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On the contrary, I would say their economy is maturing with domestic consumption becoming a dominant portion, their production methods are becoming more efficie
by aneth 15y ago
On the contrary, I would say their economy is maturing with domestic consumption becoming a dominant portion, their production methods are becoming more efficient as labor costs increase, their production scale is second to none, their educated and motivated population is poised to bring a new era of innovation and entrepreneurship to China.
And for the record, "communism in China" is already dead.
In response to the article, China's balance sheet was worse in 2004 before the triumphant expansion of the last 7 years. I had doubts they could outgrow their debts then. I have doubts today, but fewer.
China is controlled by the smartest, most effective technocrats in the world. Don't underestimate them.
- dimmuborgir 15y ago"I would say their economy is maturing with domestic consumption becoming a dominant portion." You've got it completely wrong. Consumption in China has been rapidly decreasing with respect to GDP. Their consumption was some 55% of GDP in the 90's. Then it came down to 46% around 2000 and now it stands at 34%. [[1]] All the efforts that China made to increase consumption didn't materialise. The fast growing Chinese GDP is only giving an illusion that Chinese people are massively consuming. But that's not true. On the other hand, the percentage of fixed-investment (roads, bridges etc.) to GDP has been steadily increasing in China. If Jim Chanos is to be believed, the fixed-investment now stands at a whopping 70% of GDP. [[2]] This seems to be the actual lifeline of Chinese economy. So in order to maintain the GDP growth, China has been recklessly building roads, bridges etc. fuelled by local government debts. [[3]] This has been creating massive bad-loans, over-investments and bubbles. China is building not 'because of' its economy. It is building 'for the sake of' its economy. This won't see a happy ending. [[1]] http://www.bloomberg.com/news/2011-06-16/consumers-fade-in-china-economy-racked-by-inflation-with-peak-days-gone.html http://www.bloomberg.com/news/2011-06-16/consumers-fade-in-c... [[2]] http://www.moneynews.com/StreetTalk/jim-Chanos-Soft-Landing/2011/02/02/id/384774 http://www.moneynews.com/StreetTalk/jim-Chanos-Soft-Landing/... [[3]] http://www.moneycontrol.com/news/features/why-china39s-local-government-debt-is-so-scary_563013.html http://www.moneycontrol.com/news/features/why-china39s-local...
- dublinclontarf 15y agoInnovation is not something China has a lot of, you've been reading the party papers too long. China is controlled by the most Machiavellian politians, not technocrats.