{"id":1302,"date":"2014-03-03T18:01:53","date_gmt":"2014-03-03T18:01:53","guid":{"rendered":"http:\/\/www.department99.com\/bobamter\/?p=1302"},"modified":"2014-03-04T12:47:12","modified_gmt":"2014-03-04T12:47:12","slug":"is-china-facing-a-growth-and-debt-crisis","status":"publish","type":"post","link":"https:\/\/bobamter.com\/?p=1302","title":{"rendered":"Is China Facing a Growth and Debt Crisis?"},"content":{"rendered":"

“Will China Shake the World Again?\u201d <\/i>is a recent article written by Robert Preston. Preston is the Business Editor for the BBC. The piece discusses China\u2019s ability to sustain its growth, manage its heavy debt positions and avoid a disaster equal to or greater than the 2007-2008 financial crisis.<\/p>\n

\n
Preston believes China has an “unbalanced economy whose recent sources of growth are not sustainable.\u201d<\/h5>\n
In 2007-2008 \u201c\u2026the Chinese government unleashed a stimulus programme of mammoth scale: \u00a3400bn\u2026growth accelerated… But the sources of growth\u2026have a limited life.\u201d \u201c\u2026China’s growth rate\u2026really looking at 4%.”<\/h5>\n
\u201cBut what makes much of the spending and investment toxic is the way it was financed: there has been an explosion of lending. China’s debts\u2026have increased since 2008 from 125% of GDP to 200%.\u201d<\/h5>\n
\u201c\u2026investing at that pace\u2026it is a\u2026certainty that much of it will never generate an economic return\u2026debtors unable to meet their obligations\u2026large losses for creditors; the question is not whether this will happen but when, and on what scale.\u201d<\/h5>\n<\/blockquote>\n

Based on my experience working with operating companies in Shanghai and Guangdong, I have to agree. My expectation for China\u2019s future is negative, as their potential for serious growth and continued competitiveness will prove to be very difficult.<\/p>\n

Having inspected a number of Chinese owned manufacturing companies in mainland China, it becomes apparent manufacturing knowledge, processes, and systems are woefully behind the times. Contemporary manufacturing in China corresponds to the USA\u2019s 1970 manufacturing capabilities.<\/p>\n

Therefore, cost increases from higher wages and inefficient operations are to be expected. Also, unfavorable changes in currency valuation will be a factor. This will result in lower growth, employment and capital availability. This will make it far more difficult to service its debts and fund necessary initiatives.<\/p>\n

Judging from my visits, the young and educated Chinese appear much more independent, aggressive and spontaneous. It may make its citizens more difficult to control. Social unrest could be a major issue affecting China’s economic development as well.<\/p>\n

Click on this link to read Mr. Preston\u2019s article.<\/a><\/em><\/p>\n

Here are some other posts on China:<\/p>\n

Is China\u2019s decline permanent?<\/a><\/p>\n

China to surpass USA as World Leader in manufacturing?<\/a><\/p>\n

Can Manufacturing Return to the USA?<\/a><\/p>\n

 <\/p>\nTweet<\/a>","protected":false},"excerpt":{"rendered":"

“Will China Shake the World Again?\u201d is a recent article written by Robert Preston. Preston is the Business Editor for the BBC. The piece discusses China\u2019s ability to sustain its growth, manage its heavy debt positions and avoid a disaster equal to or greater than the 2007-2008 financial crisis. Preston believes China has an “unbalanced […]<\/p>\n","protected":false},"author":1,"featured_media":1303,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,20,3,170,169],"tags":[171,223,176,175,174,173,250,178,172,177],"class_list":["post-1302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bankruptcy","category-business-failure","category-china","category-chinas-growth-and-debt-position","category-financial-crisis","tag-bbc","tag-china","tag-china-debt-crisis","tag-china-growth","tag-china-manufacturing-capabilities","tag-debt","tag-financial-crisis","tag-renminbi","tag-robert-preston","tag-yuan"],"_links":{"self":[{"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/posts\/1302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1302"}],"version-history":[{"count":6,"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/posts\/1302\/revisions"}],"predecessor-version":[{"id":1310,"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/posts\/1302\/revisions\/1310"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/media\/1303"}],"wp:attachment":[{"href":"https:\/\/bobamter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}