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China's challenge

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  • China's challenge

    In dealing with the short-term challenges of revving up and damping down growth, China's government must not forget the long-term structural challenges

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  • #2
    China Production Capacity Bumps

    Chinese economy soared 10.7% in the fourth quarter, leaving shell shocked analysts in a state of complete disbelief. Chanos even called for a contrarian bet on China. The growth has been very strongly supported by China’s aggressive stimulus spend which have been well observed through Bank lending.

    Some key points:
    • China GDP reached 32 trillion yuan while Gross National Income at 31 Trillion Yuan which shows that China is among the least leveraged economies in the world and hence best placed to surge into the next decade.
    • Chinese employment wage has risen 20% YoY inspite of the recession, which will spur strong demand side inflation over the next few years. Inflation is important for growth but the fear is if it gets out of hand. Chinese central bank has been upto the task as it has moved to limit the lending to $1.1 Trillion which in my view is still very accommodative.
    • Chinese employment is well below 5% compared to US rate of 10% and EU rate of 9.8%.


    Read more:

    http://investingcontrarian.com/china...apacity-bumps/

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