Thursday, July 23, 2009

Invesco's Views on China's Credit Powered Growth

I get the idea that history repeats. I just don't get how some people let it repeat so quickly and so soon. A quote from ChinaEconomicReview:

In order to generate the current revival they have had a huge fiscal boost and money and credit growth has exploded. This is fine for the short term but it is highly questionable whether this can be sustained without strong inflation. We have seen how quickly inflation in China can rise with overheated credit conditions… Unless we see some winding back of the credit expansion in China then there are going to be significant risks to the country in the mid-term.

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