J.T
07-28-2011, 09:37 AM
For a while now real estate speculation has been a looming danger for Chinese capitalism. A real estate bubble has been forming for some time now due to the rapid recovery of China from the global economic collapse. The problem is that this bubble is too large and is threatening to have the same effect as the sub-prime mortgage bubble that devastated the US markets in 2008.
Chinese authorities have responded to this increasing threat by tightening credit. Less credit is being made available as many factories in China are being closed. The manufacturing sector is taking a good hit right now, especially in Dongguan. There, two major factories have closed leaving thousands of working class people unemployed.
A two large textile producers closed their doors in June causing 2,000 workers to be without work. These closings were only the injury, the insult was still coming. Both facilities closed without paying the debts the company owed and still owing millions of dollars in wages to employees. It is interesting to see capitalists who claim they earned their money, and claim it is their right because they pay people, turn around and fail to pay them. I think this starkly shows what capitalism is really all about, and shows how the sense of entitlement works out in really existing capitalism.
The closing of two such large factories is causing some concern in investor circles. As China begins restricting liquidity, more and more investors are becoming worried about a wave of closures. As investors become skittish and invest less or withdraw investments, the market becomes affected to an even greater degree. According to Xinhua News Agency 10% of the textile industry is suffering and risking bankruptcy.
https://maoistrebelnews.wordpress.com/2011/07/27/capitalism-failing-in-china/
Chinese authorities have responded to this increasing threat by tightening credit. Less credit is being made available as many factories in China are being closed. The manufacturing sector is taking a good hit right now, especially in Dongguan. There, two major factories have closed leaving thousands of working class people unemployed.
A two large textile producers closed their doors in June causing 2,000 workers to be without work. These closings were only the injury, the insult was still coming. Both facilities closed without paying the debts the company owed and still owing millions of dollars in wages to employees. It is interesting to see capitalists who claim they earned their money, and claim it is their right because they pay people, turn around and fail to pay them. I think this starkly shows what capitalism is really all about, and shows how the sense of entitlement works out in really existing capitalism.
The closing of two such large factories is causing some concern in investor circles. As China begins restricting liquidity, more and more investors are becoming worried about a wave of closures. As investors become skittish and invest less or withdraw investments, the market becomes affected to an even greater degree. According to Xinhua News Agency 10% of the textile industry is suffering and risking bankruptcy.
https://maoistrebelnews.wordpress.com/2011/07/27/capitalism-failing-in-china/