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Will China’s rebalancing be bad news for profits? [Copy link] 中文

Rank: 4

Post time 2011-3-7 16:15:54 |Display all floors
Will China’s rebalancing be bad news for profits?

one view tells that it will.

while it is unsure for most

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Rank: 6Rank: 6

Post time 2011-3-8 00:32:52 |Display all floors
I don't think so - while it of course may curb profits in the short term (as salaries increase), there will be a stronger demand in the long term - and this will tremendously increase profits.

The question is not whether rebalacing will help or not. The question is rather how the Chinese government can rebalance Chinese economy while all local leaders are working closely together with business bosses...

The Wallstreet Journal published an interesting article about it: it states that the low interest rates together with high inflation in China are actually like a tax paid by ordinary people - money that is disappearing from their bank accounts. So if the government would lift interest rates, it would help fighting inflation and at the same time help ordinary people building up wealth.

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Post time 2011-3-8 07:03:46 |Display all floors
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