China counts cost of hyper growth | Bangkok Post: opinion

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China counts cost of hyper growth

  • Published: | Viewed: 1,084 | Comments: 0
  • Newspaper section: News
  • Writer: Laurence Brahm
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China's high-growth dependency on fixed-asset investments has brought with it high energy costs, opening a Pandora's box of inflation, raising costs of production, transport costs and labor wages, while reducing China's competitive advantage and threatening to roll back economic achievements that characterised the China economic miracle. 

These high costs are driving many foreign manufacturers to pull investment from China to relocate in more efficient labour-intensive countries such as Vietnam, Malaysia and Indonesia, where wages and corruption are containable.

In many ways, China's fixation on hyper growth led to China's economic miracle, but now it threatens to unravel this achievement.

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