The Chinese Communist Party now has the same number of zombie companies operating as those in the West – 15-20%. If the Chinese reign in large capitalist real estate companies, then the homes they promise to build will not be built. On the other hand, if these real estate companies are not reigned in, the CCP may lose control over capitalist markets. Michael Roberts’ solution is for China to accept lower annual growth rates, which were greatly based on real estate, and instead have the state invest in infrastructure projects, education and health care. That would result in a slower, but more solid growth rate.
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