The Chinese Boom Can't Last

July 23, 2004 9:06 AM by Nicolas Bouzou

We do not intend here to question the robust growth that the Chinese economy is experiencing, growth which is in great part related to extensive saving (around 45% of GDP) and to the influx of direct investment since 1992, when Deng Xiaoping called for more economic freedom. Furthermore, China benefits from an international comparative advantage due to its low labor costs (there is an abundant workforce, most of which remains unemployed) which allows the country to profit from dynamic exports. We are rather more concerned about the short term economic situation of China. [Full Article]