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Economy
In reply to the discussion: Stock Market Watch, Tuesday July 30, 2013 [View all]xchrom
(108,903 posts)23. Analysis - China risks following Japan into economic coma
http://uk.reuters.com/article/2013/07/29/uk-china-economy-japan-analysis-idUKBRE96S10S20130729
(Reuters) - After decades of emulating Japan's export-driven economic miracle, China appears in danger of following it into the same kind of economic coma that Japan is trying to wake up from 20 years later.
China is struggling to wean itself off a habit picked up from its more advanced neighbour: relying for growth on exports and credit-fuelled investment. That has left its economy lopsided, economists say, with massive over investment in property and industries rapidly losing their cost advantage, from mining and electronics to cars and textiles. Wages are rising, the return on investments falling.
With growth slipping, China's President Xi Jinping and Premier Li Keqiang seem determined to avoid a U.S.-style financial crisis, complete with widespread bankruptcies and job losses.
Preventing such a crisis though could embalm diseased sectors, stifling efforts to make growth more sustainable and instead create the kind of "zombie" banks and companies that sucked the life out of Japan's economy, economists say.
(Reuters) - After decades of emulating Japan's export-driven economic miracle, China appears in danger of following it into the same kind of economic coma that Japan is trying to wake up from 20 years later.
China is struggling to wean itself off a habit picked up from its more advanced neighbour: relying for growth on exports and credit-fuelled investment. That has left its economy lopsided, economists say, with massive over investment in property and industries rapidly losing their cost advantage, from mining and electronics to cars and textiles. Wages are rising, the return on investments falling.
With growth slipping, China's President Xi Jinping and Premier Li Keqiang seem determined to avoid a U.S.-style financial crisis, complete with widespread bankruptcies and job losses.
Preventing such a crisis though could embalm diseased sectors, stifling efforts to make growth more sustainable and instead create the kind of "zombie" banks and companies that sucked the life out of Japan's economy, economists say.
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