An interesting analysis of the current China industrial situation, and some good questions about their future strategy. Will the internal Chinese market growth be enough during this recession? Would a slow down in worldwide consumption be a good opportunity for the Chinese to start producing less with higher quality standards? Would that be an opportunity for implementing more environment friendly industrial processes?.
The Chinese government is concerned about the industrial glut. If companies adding capacity can't sell their extra output, they risk defaulting on their loans. And plans to wean China off state spending, creating a more consumption-driven and innovative economy, could suffer if companies continue to over-invest in commodity production. "We need to think about what our economy should rely on," says Zha Daojiong, a professor at Peking University's School of International Studies. "Low prices and large quantity or higher value-added products?"