Chen, Hongshuang: The Foam Economy and Fraudulent
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Date: 1/20/2007 1:17:06 PM
Sender: Chen,Hongshuang
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Chen, Hongshuang: The Foam Economy and Fraudulent Prosperous in China
Though agriculture and multi-industries are seriously in lower status in China, its stock market and real estate appeared foam economy features. Huge amount of capitals floated into such foam economy field from industries, hoping to acquire huge profit through speculation, and this led to the fraudulent prosperous in stock market and real estate field in China. As the chaos in China domestic commodity market made it very little profit, its surplus capacity in production is very serious, so maximum amount of capital in these related industries has been withdrawn and transferred to foam economy field. Since 1980s the capital outflow from rural area has been bigger than inflow to rural area. In recent years, under the situation of bank system strengthens its control on financial risk, capital is more concentrated upward.
The physical material economy in China has just developed to its first industrial stage, but the capital market in financial stock market is “prosperous” nearly to the extent in western countries. From surface the “fraudulent prosperous” in financial stock market and real estate industry has brought the government huge tax income and profit, but from a long term view, the “fraudulent prosperous” and speculate heat in financial stock and real estate fields will definitely held more capital that other industries may badly need, thus severely impairs the reproduction capacity in those industries; and the result could only be the distortion of allocation for production factors, impairing the fully usage of economy resource, leading the reduction of social employment and shortage of effective requirement.
Chen, Hongshuang
2006-09-20
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