From Reuters, via The Moscow Times:
From metals to machinery, China is increasingly relying on exports to find an outlet for excess production pouring out of factories built during a two-year investment frenzy that authorities are now laboring to tame.
The consequences of the oversupply will be far-reaching. Within China, inflation is likely to remain at bay as firms cut prices rather than output in order to preserve market share. That would weaken the case for higher interest rates.
Beyond China’s borders, a fast-growing trade surplus will provide ammunition for critics calling for a stronger yuan and could provoke more trade disputes like the row with the United States and the European Union over surging textile exports.
