Analysis and discussion of issues that impact business

Some interesting news from the "People's Republic".

On Tuesday, China reported its fastest economic growth in a decade and warned that booming construction and bank loans could fuel inflation, raising expectations that Beijing might nudge up interest rates and possibly the value of its currency.

I'm no global economist, but that could bode well for some here in the US.

I'll see if I can make this easy to digest - for my sake!

...U.S. and European businesses, which have complained that China’s yuan is undervalued, that its exports are too inexpensive and that it has been siphoning jobs from the developed world by dumping cheap goods in their markets.

We've heard plenty of complaints about that, and the American companies that buy their goods.

Of course, the appetite in America for those cheaper goods is huge, leading to China’s multibillion dollar trade surplus. In May, the U.S. deficit with China rose by 4 percent to $17.7 billion, reflecting big gains in imports of cell phones, clothing and textiles, and writing and art supplies.

So, we're part of the problem.

Economists said they expected Beijing to respond by raising interest rates for a second time this year and possibly allowing the currency, the yuan, to rise against the U.S. dollar, which could slow growth by making exports less competitive.

Hmmm, could the playing field be leveling a bit? But wait there's more.

But they worry that a wave of construction of factories, shopping malls and luxury apartments is creating a glut of unneeded properties and could leave banks buried under unpaid loans.

We've been down that road before - and it's not pretty.

In trade, exports surged 25.2 percent to $428.6 billion in the first six months of the year compared with the same period of 2005, though that growth rate was down 7.5 percentage points from last year, the statistics bureau said.

So no matter what import critics are saying, people outside of China are still buying.

So again, I don't have the economic expertise to analyze all this, but these remain the factors that US businesses have to face everyday in the quest for survival.

Fasten your seatbelts.