Mo Tamweer - Is the bubble in China sustainable?

This was a very well prepared talk and one of the best this year. He had a hard job to consolidate everything in about 1 hour 15 minutes.

He started by saying that China has recently overtaken Japan in having the second largest economy in the world. China have had exceptional growth rates in recent years at about 10% and are aiming for a 7.5% growth rate in 2012. However, China have spent a lot on infrastructure such as high speed rail. They have not had the response to it from the public that they would have hoped for, but are still hoping to put 20,000 km worth of track down, which is half of the circumference of the earth. These large projects have caused large districts with electricity and full plumbing to be totally unoccupied. 99% of China's largest shopping centre is empty, which shows that the problem that China are having. They have got an ageing population who are not contributing to the country's GDP like they used to. China have recently opened a terminal 3 at an airport which is bigger than Heathrow and they are aiming to make the largest airport in the world the size of Bermuda and will have 9 runways.

China are a large coal user and are self sufficient at the moment but are turning more to needing to import. China have started to export their high speed tail services after the world has seen that they have done it to a decent standard. China are still classed as a developing country, however, they are polluting as much as some developed countries in the world. China have put most of their infrastructure in the East and can now expand into the west. China have the potential to be a very large consumer driven economy of they use their middle class potential for the more luxury items. China is under the stereotype of 1000s of clothing factories, however, they have moved on and that now makes up 10% of their production.

China work on 5 year plans and are now on their 12th. When you compare charts with how Japan was before the lost decade and China, there are many similarities. The only difference is that China recognise this and are working to stop the same sort of crash. It is inevitable that China's growth will level out at about 2% or 3% in the future. The main thing that the Chinese government will be worrying about is making sure that China gradually reduce their GDP and do not suddenly crash.