China's investment fever too high

A senior Chinese minister warned recently that the world’s fastest growing economy is in danger of overheating as expansion outstrips power supplies, threatens production quality and raises the risk of oversupply.
In the first six months of the year China sprinted forward at a blistering pace of 8,2%, but then concerns about the risks were tempered by the outbreak of severe acute respitory syndrome (Sars), which was seen as a coolant for such high octane growth.
With Sars now under control, policymakers have started to speak out about the rise in the economic temperature, pushed up by the explosive growth of small, low-quality and poorly regulated steel, cement and car firms.
“If it is not cooled, the investment fever in some industries will heavily affect China’s robust economic growth,’’

http://www.mg.co.za/Content/l3.asp?ao=19604
(Free Register)

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I take all numbers about China's economy with a grain of salt. I do believe they have had huge growth but still, the numbers are not to be trusted.

Nor are ours for that matter. Every day our government stats are becomming more and more just propoganda in service to The Party. Which is what we should expect in China.

China's banking and financial system is not open. By definition it is imposssible to know what is happening. That lack of openess is an incredible thing, in that they have been welcomed with open arms by us and others in our 'free trade' games. (Clintons push for Chinese trade agreements was a stupendous economic and political blunder) The lack of 'free trade' in their currency is a mighty tell in how weird a thing has been created. Simply put, their low currency, while not actually the biggest factor in their success and the one being carped about here more and more, along with the black hole that is their government budget, simply means that they violate ever principal of 'free trade', yet our pols and corporations love it. They love a thing which is anathma to their stated ideology.

That growth rate quoted,if anywhere near right, 8.6%, is simply unsustainable. Such growth is always inflationary and destabilizing. One might note that commodities are now on fire. Finished goods are still near deflation, but raw commmodities are the opposite. Perhaps that has little to do with China and more to do with our profligate monetary regime but I think Chinese demand is playing a part.

Its harder and harder to hide the US economic slump, so they are now blaiming china for "taking away" our jobs by being too cheap.

And don't forget that we were the ones who were pushing China to be an open market. We were the ones that wanted them to be a capitalist system rather than a planned economy. We bitch about it when they're communists. We bitch about it when they become capitalists. My God, it seems like China can do nothing right. Damned if they don't take our advice. Damned if they do.

<sarcasm>China's biggest problem is that they're not white like we are, therefore they are ALWAYS in the wrong. </sarcasm>