China’s economy is out of control
An interesting article I read on MSN Money, talking about the reality of China’s booming economy.
In the second quarter, China’s gross domestic product grew by an extraordinary 11.3%. That’s a significant speed-up from 9.9% growth in 2005, 10.1% growth in 2004 and 10% growth in 2003.
That’s a problem, because an economy can have too much growth. In China, it has led to massive overinvestment in manufacturing assets in sectors already suffering from oversupply. Investment in fixed assets — everything from steel mills to cement plants to oil refineries to highways — grew by 30% in the first half of 2006.