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Can China Save the World? [Copy link] 中文

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Post time 2009-8-4 08:50:59 |Display all floors
This is an interesting article but far too long to be posted over here. A few excerpts:


There aren't a lot of places in the world these days where consumers speak with that kind of confidence. With the U.S., Japan and all of Europe mired in the worst global recession in 30 years, China has shown a restorative strength that six months ago many doubted it had. A devastating slump in exports crippled growth late last year, but on the back of a $586 billion government stimulus program - about 13% of GDP, spread over two years - China has snapped back. The economy grew 7.9% in the second quarter and will now probably expand 8% or more this year. Evidence of increasing momentum appears almost every day. Factory production has begun to edge up, in part because Chinese consumers continue to spend money at a healthy pace.


The U.S., the unquestioned leader of the global economy, is now in the midst of a disorienting shift in economic policy, away from the let-it-rip form of capitalism that has guided it for almost 30 years and toward more overt government control and regulation of huge swaths of the economy. No one yet can safely say whether this is wise, but in the U.S. it is certainly the stuff of increasingly fierce debate. No such doubts are evident in China, where the government reacted to the crisis with alacrity and the economy is now responding in kind.


That's why, for global companies like General Motors, China is no longer the future. It's the present. Of the world's 10 biggest economies, China's is the only one that is growing, and it could soon surpass Japan 's to become the world's second largest.


The whole article is available over here:


http://news.yahoo.com/s/time/20090803/wl_time/09171191363800

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Post time 2009-8-4 14:40:43 |Display all floors
China is attempting to forestall economic collapse by pulling a Japan: it's ordering banks to loan money to industry and trying to ramp up exports despite failing demand overseas. China's economic growth is largely coming from (1) virtual economy (the proceeds from a variety of speculative enterprises from skyscrapers that have no tenants to the vast commodity stockpiles which have overflowed warehousing and are now anchored offshore as well) and (2) pushing out other exporters. Neither strategy is sustainable or adding to global growth. The first is just leading to inflation--hence rumors of a coming, dramatic tightening order--and the other is depressing the economies of other exporting countries, yielding no net improvement in global economic conditions.
"Justice prevails... evil justice."

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Post time 2009-8-4 14:53:04 |Display all floors
over capacity is going to kill things in a year or so.

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Post time 2009-8-4 15:00:23 |Display all floors
Originally posted by Exergy at 2009-8-4 15:53
over capacity is going to kill things in a year or so.



Wishful thinking, we'll see soon.

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Post time 2009-8-4 15:03:40 |Display all floors
China is not alone. There are two other East Asian economies that are rocketing ahead:
GDP China, SK, Singapore.gif

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Post time 2009-8-4 15:07:00 |Display all floors
Originally posted by satsu_jin at 2009-8-4 15:00



Wishful thinking, we'll see soon.


I really hope not.  Most of the overcapacity I see is in the automarket.  What international automake is not going to double its capacity in the country in the next three years?  I cant think of any that are in the Chinese market that are not gearing up for huge expansion.  And yet my fear is that the current auto sales are really buoyed by tax cuts and stimulus right now, how is it going to expand so fast unless the government is forced to keep the tax cuts and stimulus going.

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Post time 2009-8-4 15:22:01 |Display all floors
Originally posted by Exergy at 2009-8-4 16:07


I really hope not.  Most of the overcapacity I see is in the automarket.  What international automake is not going to double its capacity in the country in the next three years?  I cant think o ...



Re. auto industry - I understand that the Obama administration implemented a program to stimulate auto sales (for a rather short time of two weeks) and from what I read it is successful. They want to inject another 2 b $$ to keep it rolling.

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