Posts
Well, in response to your comments on the future of China, I found this article (since I love NY times, clearly) talking about China's inflation issues, costs of production, lending, etc. It also mentions some definite problems that China is going to have soon. Check it out. Is there any way for China to avoid inflation successfully? Or to cusp it so that it doesn't get out of hand and cause the government more problems?
I personally feel that China has some really brilliant minds that understand how to mold its economy. The communist regime has more power over how the country runs, so its hard to compare it to the United States and our republic. I think they will be able to maintain their economic prosperity just because of the way their political system runs and its resources are vast. However, like Mark mentioned, it will be tough to continue running a country when its capital runs out of water. They waste so many natural resources, its ridiculous. But they do realize this and have been trying to change. My friend in Beijing mentioned recently how much the weather and pollution has changed for the better in his 4 years living there. They are still a developing country, so overall, I have faith that they will be able to sustain their growth indefinitely. They just have to be careful, definitely. Thoughts?
Subscribe to:
Post Comments (Atom)
I think that what will bring China's prosperity to a halt is not necessarily anything economic. For instance, I think they can overcome inflation and increase capital. But, because the communist regime ultimately does rule with a heavy hand, I think that political unrest will eventually come to be. We see this throughout the pages of any history book -- think USSR.
ReplyDeleteAs China's poor citizens begin to move into the middle class with the growth of China's economy, more and more citizens will become educated and inevitably dissatisfied with the political leaders. The regime will crumble, and the economy will be forced to start over.
Then, like in Russia today, incredible amount of resources and wealth will fall in the hands of a small percentage of individuals...putting the breaks on wide economic growth.
Abbreviated and lacking hard evidence, I know. Just a quick thought.
This comment has been removed by the author.
ReplyDeleteSo the link seems to be a link to an article Jennifer posted on a few days ago. I think you meant to post this: http://www.nytimes.com/2011/04/16/business/global/16yuan.html?pagewanted=1&partner=rss&emc=rss
ReplyDeleteChina's central bank has raised the amount of money that lenders must hold in reserve for the fourth time this year. By insisting banks hold more cash, the central bank hopes to restrict lending, which in turn will reduce spending.
They are raising the required reserve ratio from 20% to 20.5%. This is expected to lock up about 350 billion yuan (or $54 billion) that banks would otherwise be able to lend. The central bank has also raised interest rates four times since October as it tries to curb inflation.
This comment has been removed by the author.
ReplyDeleteYes, that was definitely the article I was speaking of. I have fixed the link. Thanks for the correction, Ankur!
ReplyDelete