In line with what economists have been saying is inevitable, Chinese manufacturing is registering a significant decline. See HERE,for example.
Inventories are piling up, factories are running at around 65% capacity, steel and iron production is flat, some industries report 30% declines, and profitability is vanishing.
For years some have speculated that Chinese growth shows how a market can be contained, harnessed, and controlled to serve political masters. Even the Chinese government cannot hide from the laws of economics.
Economists already knew that.
Why? Because by containing the free-market activity and growth in SEZs China has not allowed the infrastructure to develop in a natural and efficient manner. Too many people are in the SEZs, and virtually no economic activity takes place outside. Now they have reached a point where the SEZs can only grow at the pace of Western growth (technology/technique), and b/c the government has so contained peoples' energies, there is nowhere else ready to grow. Additionally, there is no where else, geographically, conducive to rapid growth.
No comments:
Post a Comment