Where is Hong Kong and China Headed?

I knew that eventually it would come down to this. It was simply a matter of time before the US decided to become more vocal about how Hong Kong is governed and what happens to the former citadel of free markets. The Chinese Government does not like what we have to say. Go here to read more.

Things are becoming more volatile in China. The banks have major problems, the public infrastructure cannot support the crushing weight of the nation's rapid development, China is not holding to its commitments to the WTO, SARS and other health problems are growing, competition for skilled labor and other development resources is escalating. Did you know that direct investment by US firms has actually dropped by 24% to $3.7 billion through November 2003 because of China's lack of performance relative to the WTO's requirements.

I said this some time ago. Watch the China situation VERY carefully. This is not a good time to increase your business outsourcing to China. Trust me. The huge ball of string is rapidly coming unravelled. Some of what you see is political inter-play and that will always be there. A more deep-seated problem is the fact that China's growth is NOT sustainable.