Thursday, December 15, 2011

China's Three Decades of Double Digit Growth Over?

Big changes are in the wind for China - and it will impact Europe and the U.S. It appears that China's miracle of three decades of double digit growth, averaging around 10% per years, is over.

Why? Part of it could be that it has reached that part of development that makes such high growth rates impossible - think of Germany and Japan after WWII, in which the construction boom finally ended as they reached developed status.

This development is risky for both China AND the U.S. China has managed to employ millions in export related manufacturing. Now those people will see a slowdown as wages have increased - reducing job prospects for the millions of Chinese in the country that have been immigrating into the cities for work.

Less work means more potential political turmoil, which China's leaders dread more than anything else.

It is possible that the slowdown could open up China to a "China Spring" as more people demand a voice in government to vent their frustration with falling housing markets and fewer jobs (Shanghai's housing prices are down 40%!)

For more details check out this article:

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