While the US frittered away much of the stimulus on throwing money at
banks, the Chinese actually created much more capacity. Business Week
used to do a good job of understanding real issues. Here the new
Bloomberg magazine notes that the extra capacity poses a risk to the
West because China will now have to export more, creating a different
sort of imbalance.
Roberts, Dexter. 2009. "China's 'Made in China' Problem: The Downside to
Beijing's Huge Stimulus is a Glut of Factories and Output That May Spur
Trade Frictions." Business Week (21 December): pp. 20-21.
http://www.businessweek.com/magazine/content/09_51/b4160020918482.htm?chan=magazine+channel_new+business
"While Beijing's $586 billion stimulus package has helped the mainland
navigate the global financial crisis, there's a downside. Fixed asset
investment -- money spent on factories, highways, and other big-ticket
projects -- soared 40% in the first half and accounted for nearly all of
the country's growth."
-- Michael Perelman Economics Department California State University Chico, CA 95929 530 898 5321 fax 530 898 5901 http://michaelperelman.wordpress.com _______________________________________________ ope mailing list ope@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/opeReceived on Mon Dec 28 01:03:51 2009
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