If They Build It, Who Will Come?
While much of the world continues to languish in a starting and stopping economic recovery, China’s impressive development and economic growth have proceeded with only the slightest of pauses. Its 30-year track record and ability to maintain full speed ahead during the recent downturn have only solidified many observers’ opinions that China provides an example of effective government control and is destined to surpass the United States on the world stage in the coming decades—with its economy eclipsing America’s as early as 2016. Despite the unbelievable success of the PRC’s initiatives, several problems still loom large for the East Asian giant. Currently of great concern to Beijing is the rising inflation rate that has some investors starting to doubt the sure bet of the Chinese market. Inflation has become a serious worry for many in China. In March inflation stood at 5.4 percent compared to the same time last year. This was driven in large part by soaring food and housing prices. The first two months of 2011 saw food prices climb by 11 percent and housing costs jump by over 6 percent compared to 2010, according to the Chinese government. This is terrible for a developing country desperately trying to be more consumer-driven because as these basic living expenses go up, people have increasingly less free income to purchase nonessential items. Underlying the skyrocketing cost of homes...
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