BUT IT'S THE CHINESE MIRACLE!:

Is China's rebound for real?: Some economists say that too much of China's growth is coming from investment in inefficient state-owned enterprises and that stimulus policies are diverting the country away from long-needed reform. (David Pierson, October 21, 2009, LA Times)

Though economists credit Beijing's policies for carrying the country through the worst of the global crisis, some question the sustainability of the recovery. Some say that too much of China's growth is coming from investment in inefficient state-owned enterprises and that current stimulus policies are diverting the country away from the reform long needed to balance its economy.

"They're moving the economy in exactly the wrong direction," said Yasheng Huang, a professor at the Massachusetts Institute of Technology's Sloan School of Management and a leading critic of China's economic strategy.

At the heart of China's recovery is a $585-billion government stimulus package and a torrent of new bank loans totaling $1.27 trillion this year. The injection has kept industry humming, maintained employment at reasonable levels and launched billions of dollars' worth of public infrastructure projects.

China Struggles to Curb Steel Output (CHUIN-WEI YAP , 10/22/09, WSJ)

Despite China's campaign to slim down its steel industry, the country's crude steel production in September was the second-highest ever in terms of volume, underscoring the formidable challenge Beijing faces in curbing capacity.

The National Bureau of Statistics said Thursday that steel output rose 29% in September from September 2008 to 50.71 million metric tons.

"The signs point clearly to overcapacity, and we expect output will be maintained at high levels" in the coming months, said Ma Haitian, senior steel analyst with state-owned metals consultancy Antaike Development Co.

Posted by Orrin Judd at October 22, 2009 5:35 AM