4/14/2013

China's economy may be stabilizing for now, but a number of indicators -- including a rise in finished-product inventories -- are signaling a persistent problem with overcapacity in older and some newer sectors of the economy. Grave economic consequences could ensue if the problem isn't addressed, analysts say. "Overcapacity has exposed structural weaknesses in the process of China's industrialization," said Li Yan, director of industrial policy research at the Ministry of Industry and Information Technology.

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