Free Republic

The Truth About China: An Economy On The Verge Of A Nervous Breakdown Patrick Chovanec, An American Perspective From China | Oct. 3, 2011, 7:29 AM I just returned from a trip to New York, where earlier last week I gave a talk at the Council on Foreign Relations. The topic was the question on everyone’s mind these days: the outlook for China’s economy. Over the past several weeks, a number of news reports and market figures have caught my attention, which appear to indicate that China’s economy may be approaching a crisis. I use the word “crisis” in the...

There is one overwhelming fact about the world economy that cannot be wished away. Excess capacity in industry is hovering at levels not seen since the Great Depression. Too many steel mills have been built, too many plants making cars, computer chips or solar panels, too many ships, too many houses. They have outstripped the spending power of those supposed to buy the products. This is more or less what happened in the 1920s when electrification and Ford’s assembly line methods lifted output faster than wages. It is a key reason why the Slump proved so intractable, though debt then...

CAR carriers are the ugly sisters of the high seas. Even their owners would admit that, with their high freeboard, they are not beautiful. But they are very functional, designed for a specific purpose — to transport automobiles and trucks. When Japanese motor manufacturers decided to go global some 30 years ago, they needed a different type of ship to transport vehicles in large volumes. Until relatively recently, this was a fairly simple business, with two main trade lanes, from Japan to the US, and Japan to Europe. Since then it has become far more complicated. Like other sectors, it...