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IPFS News Link • Economy - Economics USA

Keynesian Medicines are Not the Cure for China's Ills

• The Daily Bell

An example of this is a recent article by Washington Post columnist Robert Samuelson raising the question, "China's Coming Crash?" (May 24, 2015). Samuelson summarizes the economic data behind the apparent economic slowdown in the Chinese economy.

Gross Domestic Product growth in China has decreased from its sizzling annual rates of 10 percent to 7 percent or less. The Chinese housing market has seen significant price declines. And government debt at local levels has exploded in recent years from 6 percent of GDP less than 10 years ago to more than 33 percent by 2013, putting a drag on government spending.

The American media have had numerous articles about high-rise residential housing complexes in China that run for miles along the highways that are hardly occupied; or "ghost cities" with shopping malls that stand eerily empty; or industrial plants that have disproportional unused production capacity; or infrastructure construction projects funded by municipal, provincial and national government spending binges that often seem to have no rationality other than expenditures to generate production and employment for anything.


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