Barron’s has a great item looking at the apparent recent rise in overseas accquisition activities by Chinese companies. I’ll post something separate on that later, for now, here’s a paragraph that caught my attention. (via Howard French):
So far, in any case, the Chinese economy appears quite reluctant to cooperate with even the mildest efforts to cool it off. Industrial production was up a sizzling 16.6% in May over the same month last year, fixed investment has been running upwards of 25% ahead of last year, oil demand continues to spurt and China has its very own, swiftly growing and very large real-estate bubble. A tendency to operate at least part of its industrial plant so that social stability tops profits as the bottom line obviously serves to camouflage weaknesses, but only for so long.
Our own feeling is that the regime’s ambivalence and equivocation about stepping on the brakes in earnest make China’s mother-of-all-booms almost a sure thing to became a big, fat bust, possibly some time next year. We won’t even hazard a guess as to the size and severity of the fallout, except it’ll be huge and it’ll be global.
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Mao: The Unknown Story - by Jung Chang and Jon Halliday:
A controversial and damning biography of the Helmsman.
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