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Lillian Bogonko

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Is China really slowing down or has it simply chosen to focus on its domestic market instead of relying on exports?

I read Kenneth Rapoza`s post on Forbes and thought how about a discussion on what is really going on with China. See attached link and let`s keep talking.

http://www.forbes.com/sites/kenrapoza/2012/09/10/china-downgrades-coming/

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  • Sep 20 2012: Hey Lillian, I think that the domestic market is becoming more and more important. But I'm of the opinion that this is not an active decision of the Chinese government but is rather resulting out of recent social developments:
    I'm currently doing an internship a few hours away from Shanghai and everybody's telling me that this is not the place to be for export-oriented business anymore. They're all moving to Vietnam, or Cambodia or elsewhere. Salarys became just way to high.
    At the same time, the Chinese government is trying to push the GDP with (either direct or indirect) infrastructure pojects.. Seriously, I've never seen so many construction sites. This works fine for the moment, due to their huge trade surplus.
    But this is what I think is happening next: The problem might be that when exports are declining the trade surplus is shrinking, too. Consequently, there's no money for those big infrastructure programms anymore. But there are still roughly 600 million more or less poor people who are demanding continuing economic growth...
    What's your opinion on this topic? What do you think is going on at the moment and where is it going in the future?

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