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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4002)	12/27/2004 6:27:15 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

"Research by Alliance Bernstein found that China was responsible for 79% of the increase in global steel production in 2003, and consumed 37% of the world's cement. It is installing 150 gigawatts of electricity generating capacity, double the UK's total capacity. Every global downturn of the past 30 years has been associated with soaring energy costs, so watch the price of crude carefully. ... Finally, there's the wider question of how the global economy copes with rapid Chinese growth. Clearly, the short-term risks to the west from a classic boom-bust cycle are distinct from the longterm risks posed by China's rise to economic superpower status. The reason to be worried about China in the immediate future is that it is in danger of overheating. There has been a phenomenal spurt in investment in manufacturing plant and machinery far outstripping spending on transport and energy infrastructure. There are widespread bottlenecks in the economy, which the government is now trying to remedy through a concentration of infrastructure spending. The disparity between China's manufacturing capacity and its lack of infrastructure means everything it sells on global markets is subject to deflation, everything it buys subject to inflation. There will inevitably be a lag before the new infrastructure is built and there has to be a risk of China slowing quite markedly, even perhaps suffering a hard landing of the sort that visited the smaller countries of south-east Asia in the late 90s. China's size means, of course, that the fallout for the rest of the world would be immeasurably greater. In the longer term, this will be seen as a hiatus in China's development, just as the wild gyrations in the US in the 19th century were an inevitable part of a rapid transition from agrarian economy to industrial powerhouse. " guardian.co.uk