Pages

July 27, 2012

China stimulus unsustainable ? Wait til 2015-2020

So we may see in 2015-2020 if China's new round of economic stimulus proves unsustainable. China is building out all of its high speed rail and having massive local stimulus and infrastructure construction.

The Chinese economy will have a lot of stimulus for the next three years.

Some think that China could not stimulate to boost GDP. This claim will be tested in the second half this year through 2013 and 2014.

There will also be some interesting comparisons between the hundreds of billions of spending in Europe on Greece compared to what happens with Changsha.

European Central Bank President Mario Draghi pledged on Thursday to do whatever was necessary to protect the euro zone from collapse, sending a strong signal that inflated Spanish and Italian borrowing costs were in his sights.



I think that China as a whole will be able to make reasonably effective use of this infrastructure build.

It will be more useful that what the US spends on military and defense above the $300 billion per year level.

The ECB and European stimulus will help China some by increasing some exports from China to Europe.

If you liked this article, please give it a quick review on ycombinator or StumbleUpon. Thanks
blog comments powered by Disqus