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Strategies & Market Trends : Greater China Junior Stocks
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To: Julius Wong who wrote (329)10/19/2003 9:51:27 AM
From: Crossy  Read Replies (1) of 1992
 
Julius,
some observations - the article tries to frame China in terms of risk management problems. No wonder it was taken from a CFO magazine. The phenomenon of investment creating overcapacity seems to be lingering in the memories of these people from the telecom crisis.

There's just one difference: FDI in China creates a production base. The PRC has the ability to outcompete allmost all other suppliers, especially for labour intensive processes. This comes in addition to your "infrastucture needs first" explanation. So either the PRC meets increased demands or they will take the business of others. However the PRC will surely be employed. This might export disinflatory tendencies to the rest of the world - a mixed bag for other countries.

Domestic consumption will go up but later. That's the usual trajectory of tiger economies..

rgrds
CROSSY
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