Chinese Economy...

Article;
All the signs coming from the economic data show that China is in big trouble.

Comment;

We know that rising wages will be detrimental for Chinese competitiveness but good for domestic consumption. China has absorbed all the surplus labor and has reached its limits of expansion and can not expand without raising wages. I think China will continue to use depreciation as a tool to retain its competitiveness. There are two things to achieve competitiveness either devaluation or depreciation. The former is materialized when the market cut wages to achieve competitiveness in foreign trade and the latter is done with a view to achieve cheap currency and generate demand. I think we will see the Chinese economy slowly turning to domestic demand after cashing three decades of foreign demand…