摘要
China＇s economic adjustment is just beginning. Many businesses are facing a liquidity crunch and the pressure may intensify in the coming weeks. Inevitably, many voices would argue for bailouts and loos-ening of monetary policies. The excuse is that the bankruptcies of some companies would lead to rising unemployment and social instability. This is the wrong argument. China is experiencing structural labor shortage and the lay-offs from the bankruptcies could be absorbed in a matter of months.
