Wednesday, June 22, 2011

When the Chinese Economy "Sneezes"

l  Based on recent statistics on China’s economy, the likelihood of a “hard landing” appears to be increasing. Some Taiwanese investors have, therefore, become wary of China's economic prospects, which resulted in the weak performance of Taiwanese stock prices in recent weeks.

l  In fact, with China’s troubling economic numbers, there is growing nervousness about China's short-term or mid-term economic performance. Despite the worrisome numbers, however, many research institutions still predict that China's economy will grow at a moderate pace this year.

l  At the same time, as China continues to stimulate its domestic spending and investment, many expect the Chinese economy to be less dependent on external trade and move toward a higher level of productivity. The increase of capital goods resulting from such strong business investment activity will, in turn, create more skilled jobs in China.

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