Chinese economy seems to hit the
globe, on the past years government of China flood its country on investments that was
expected to boost overall economic activity. But due to misdirected incentives
it creates a glut that results to over manufacturing capacity.
The government of China is
aware on that risk towards flood of investments, they are trying to shift
towards higher quality and competence to overcome those economic risk. But its
continual dependence with investment fortifies economy that will need
reformation in the future.
“The year was 2008 when the world
economy faces crisis” many were greatly affected except China. They
boost on investment and developed fixed capital to investments more than USD24 trillion.
They have increased everything from manufacturing, construction and imports.
They overlooked future possibilities
that result to 14% debt in 2013 that surged 36% of its GDP. United States
rating agency rated them “Poor” as its corporate debt rose. This indication was
a sign on worsening financial health of Chinese business.
As they double their production,
they have miss calculated the possible demands on the manufactured goods in
which it results to overproduction. In just 10 years they have rose their wages
threefold with less cash flow getting in and results to overspending.
“China can design new system platforms,
but it is not gonna happen overnight.”
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