March 5, 2006


China admits to 'deep-seated conflicts' amid economic boom (Richard Spencer, 06/03/2006, Daily Telegraph)

China's prime minister gave a surprisingly gloomy assessment of the state of the country's booming economy and fast-changing society in his annual speech to parliament yesterday.

In the face of near-euphoria among governments and businesses in the western world about the pace of its growth, Wen Jiabao said long-term economic health was at risk while society faced "deep-seated conflicts". [...]

"Production gluts are increasingly severe, prices of related goods are falling and inventories are rising," he said. "Profits are shrinking, losses are growing and latent financial risks are increasing." If companies start defaulting on debts it could trigger a crisis in the banking system, which has given out huge loans to fuel the investment.

Mr Wen is under pressure on several fronts. He needs to bring excessive growth under control, but keep it high enough to employ China's vast pool of surplus labour to avoid social unrest.

For President Hu Jintao, the answer to corruption has been to intensify a campaign to revive the teaching of Marxist theory to party cadres. There has also been a shift away from economic reforms such as the privatisation of state-owned industries.

Yeah, increasing the power of bureaucrats seems sure to reduce corruption....

Posted by Orrin Judd at March 5, 2006 9:39 PM

revive the teaching of Marxist theory to party cadres.

That's the ticket.

Posted by: Gideon at March 5, 2006 11:42 PM

Wow. I did not know that it was this bad. It's beyond parody. As OJ would note, we don't see a lot of this nonsense coming from our new best friend India.

Posted by: JAB at March 6, 2006 12:30 AM

Is crying that things couldn't be worse, the inscrutable east's way of deflecting the attention of demons who would seek to spoil their prosperity?

Posted by: erp at March 6, 2006 10:26 AM

Sounds like late 19th-century America to me.

Posted by: Bartman at March 6, 2006 11:28 AM