To much money in China

In the article Beware Of Hot Money, it points out how China has been growing extremely fast the past couple of years which means lost of money has been flowing into China. The large amounts of money are causing prices in China to rise really fast especially in real-estate. The government is trying to implement new laws and is issuing bonds to absorb all of the currency that is floating around China, but if they cannot keep up with the inflation that is happening China along with the rest of the world could be in big trouble. There is a bubble that is beginning and without some changes it will grow and then burst which will hurt the world’s economy because China is a heavily used place for businesses from around the world right now and the affects of the inflation after the bust will be scary. What changes need to happen to try and prevent this from happening?

1 comment:

Dr. Tufte said...

-1 on Emily's post for grammatical errors.

I tend to agree with this. It's forecasting, so I'm being guarded, but I just don't think it will be pretty when China starts to have problems. There's too much kleptocracy, too much inequality, and too much repression for that place to hold together. But, as Dennis Miller says: that's just my opinion, and I could be wrong.