The Economist Goes to China

June 12, 2011 in Daily Bulletin

The Economist’s “Free Exchange” blog recently went to China and returned with a few impressions.

  • The Chinese housing market seems to be doing okay. The government is overseeing a huge increase in supply but demand is also likely to significantly increase.
  • A lot of Chinese labour is being absorbed by the service industry, leading to incredibly low rates of productivity. Free Exchange notes that some hotels appear to have as many staff as they do guests
  • According to Free Exchange China’s short term outlook is exceedingly positive with the Chinese government having the resources to effectively manage any temporary crisis. The long term outlook is less clear with significant structural barriers in the economy and little political will to reform them.
  • The Chinese government has a good reputation with the citizens and beliefs that the government would collapse in a democratic revolution in the face of an economic crisis may be misplaced.

There’s a lot of other interesting information including more details about the Chinese housing market and the status of Chinese entrepreneurship. Read the full post over here.

Source: Economist