While the wages may sound low to Westerners, even with free room and board, they are high by local standards, holding down turnover and training costs. The workers, mostly young women who stay one to three years and then return to their home provinces to start small businesses or families....Well, that's not really news, but let's not forget it.
Business executives and economists often complain that factories are built with little attention to whether similar plants are being constructed elsewhere, or to how low prices will fall if all of them start churning out the same products at the same time....
"In China, overcapacity is not an issue that stops a businessman, because they always think they can do better," Mr. Jaeger said...
The problem arises when too many companies make the same calculation and invest too much.
Lists of potential causes of a Chinese economic derailment tend to start, and sometime end, with a banking crisis. By plying borrowers with ever more loans, following lending criteria that credit ratings agencies contend are laced with corruption and political influence, Chinese banks have wound up with extremely high proportions - as much as 45 percent - of nonperforming loans...
Most Chinese savers have few alternatives to the state-owned banks as places to park their cash, and the banks appear to have informal but total government guarantees of deposits. As a result, they have not experienced significant losses of depositors, although that could change as ever more businesses engage in trade deals that can be used to transfer money to safer banks overseas if hard times ever return to China. Lately, concern has gone beyond the stability of the banks themselves to the economic effects of all the extra money sloshing through the banking system.
More dubiously,
Hong Kong May Be Starting A Long March Toward Democracy. I hope so, but I'm afraid not.
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