China Warns Of Excessive Industrial Investment.

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Ali Abdullah                                                                                                                  February 23, 2004

Ali Abdullah

Economics Commentary 1

LPCUWC Year 1 (2003-04)

23rd February 2004

Title: China Warns Of Excessive Industrial Investment.

Source: Xinhua News Agency

Author: Unknown

Date of Article: August 12, 2003

Key Issue: Excessive Supply of Steel

Total Words: 750

 

                                                                                         

China has been having an excessive production of steel since the beginning of year 2003. The article illustrates that there has been excessive investment in the steel market (excessive production of steel). The steel is basically used in building materials, nonferrous metals, and automobiles. It also describes to us that this is due to the duplication in construction. It tells us how the government it dealing with the excessive supply of the steel and how it is affecting the economy of the country. It is leading to high rate of unemployment and bad loans that are causing loss the banking sector as mentioned later in the article.

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The quantity demanded of a good or service is the amount that consumer plan to buy in a specific period of time at a particular price. The quantity supplied of a good is the amount that producers plan to sell in a given period of time at a particular time. Over supply is when a good is supplied more then the quantity demanded. Unemployment is there are workers who are able and willing to work but do not have jobs.

All the above problems are because some of the illegal duplication of the steel works. It is ...

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