Published: November 29 2009 19:05 | Last updated: November 29 2009 19:05
The world has changed; but China has not. China has responded to the world financial crisis with what seems to be great success. But this is an illusion. China’s solution – a surge in spending on investment – will create greater excess capacity. China’s high-savings, high-investment economy is costly for its people and destabilising for the world. The time for a radical reform is long past.n a disturbing new report, the European Chamber of Commerce in China lays out the challenge in six sectors: aluminium, where the capacity utilisation rate is forecast to be 67 per cent in 2009; wind power, on 70 per cent; steel, on 72 per cent; cement, on 78 per cent; chemicals, on 80 per cent; and refining, on 85 per cent. Yet vast additional capacity is on the way.
"One of the things I think the stock market is dealing with right now is the potential for a continued rise in the dollar, which would be really bad for corporate profits," especially at multinational U.S. companies whose exports would become less competitive in such a scenario, said Doreen Mogavero, chief executive of Mogavero, Lee & Co., a New York floor brokerage.
Market is way over extended.Just wait till the 5 year mortages reset this spring.Wait till comerical realstate colaspes next.Alot of unrest in China anything could happen there.Dangerous times .Not to mention what happpens with Iran and Yemem.