China: All Bets Are Off
Michael Sheridan reports from Hong Kong, in the Sunday Times:
From Hong Kong to Shanghai, shuttered factories and laid-off workers tell a tale of how the world credit crisis may end the Chinese export miracle and pose the greatest threat to economic reforms since they began in 1979.
Bankruptcies and unemployment are climbing, while political pressure is mounting from the left on policymakers. Some officials are openly challenging the export-driven model that led China to stack up foreign reserves of $1,800 billion (£1,060 billion). There has been little effort to cover up the distress, perhaps because of rivalries between factions of the Communist party.
China Central Television, for example, recently broadcast a report prepared for the cabinet saying that 67,000 companies have gone bankrupt in the first half of the year and 20m workers have lost their jobs.
POSTED COMMENTS: One Response
Yeah some problem when trade surplus keep piling Up
Oct. 13 (Bloomberg) — China’s trade surplus widened to a record in September, boosting the currency reserves that may shield the world’s fourth-biggest economy from the global crisis.
Exports rose 21.5 percent from a year earlier to $136.4 billion after gaining 21.1 percent in August, the customs bureau said on its Web site. The trade surplus climbed to $29.3 billion, a figure derived by deducting the value of imports from the number for exports.
China has cut interest rates twice in a month to stimulate the economy as the worst financial crisis since the Great Depression undermines global growth. The surplus adds to $1.8 trillion of foreign-currency reserves, a buffer that may help the nation to maintain an expansion of more than 9 percent even as a world recession looms.