[Marxism] China's nationalized sector has key role in current gains
sartesian at earthlink.net
Sat Oct 3 09:22:23 MDT 2009
Think this article posted by Fred is a wee bit late to the party. It, the article, is an old "on the one hand..."
But on the other more recent hand, we see tremendous overinvestment in fixed assets in China, we see tremendous overproduction in aluminum, cement, steel,
The Financial Times and Wall Street Journal reported yesterday that China's State Council, warning of excess capacity, has set rules to limit investment in seven sectors of the economy and has banned, literally banned investment or construction in any new aluminum smelters for the next three years.
We know that in the steel industry, overcapacity for the domestic market in China is around 25% with the export market severely impacted by the global contraction. China has 800 steel producers, with the largest BaoSteel producing about 35 million tons per year, just about 5% of total output, and producing an amount equivalent to that of Nippon Steel with 6-7 times the labor force.
The aluminum market has become the "model" of a speculative play [almost as severe as the run up in oil prices a year ago], with spot prices rising from $1300 per ton to $2100 per ton while stocks on hand have nearly doubled from 2.4 million tons to 4.5 million tons between January and August of this year AND global consumption has declined 7 percent.
That hssss.. you can barely hear behind the noise of the cash registers? That's the gas starting to slowly leak out of the Chinese balloon.
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