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Strategies & Market Trends : Asia Forum

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To: tekgk who wrote (431)1/4/1998 3:11:00 PM
From: Tony van Werkhooven   of 9980
 
From what I understand, China is currently at approximately 0% inflation, under utilized capacity, and lots of goods to sell. Combine that with significant structural unemployment (official plus unofficial), the risk of starting an inflationary spiral in the near future seems minimal.

If you are right, that "no sane depositor will put their money on deposit at a bank at the proposed new rates," than the central bank will accomplish its purpose- reallocate assets to either increase domestic consumption or provide capital to support the needed restructuring of the state enterprises. Hence making internally generated capital all the more important

Given the existing turmoil in asia, outside capital will be more difficult to obtain than it was just last summer.
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