American Leftists pine for the authoritarian rule in China that will make sure The State runs the economy and “gets things done” … so how is that working out?
The Chinese economy has wasted $6.8 trillion (£4.3 trillion) in investment during the last four years.
Six-point-eight trillion dollars.
That’s according to a report from China’s National Development and Reform Commission and the Academy of Macroeconomic Research, written up here in the Financial Times. The report says that amount has been “ineffective investment.” […]
Even in the enormous Chinese economy, that’s practically half of the investment between 2009 and 2013, the period covered by the investigation. This is likely to have pretty grim effects on Chinese economic growth in the years ahead.
Investment of whatever variety initially shows us up in GDP figures. For example, the spending on building a bridge. Initially, the bridge construction will boost GDP simply because of the spending needed to finish it.
But after that, the economic effect of the bridge depends on a lot: Where is it from? Where does it lead to? If it’s a useful investment, it could keep boosting spending by making consumers’ journey to a city less arduous, and allowing them to go to the shops more often. If it’s a bridge to nowhere, it’s not likely to have that effect, and will simply be a waste of resources without any positive growth effect in the future.
China seems to have built the equivalent of $6.8 trillion in bridges to nowhere.
According to the FT, the authors are blaming the investment on low interest rates and other forms of government stimulus, suggesting that there’s been a sort of malinvestment. The country’s deserted ghost cities are probably the ultimate symbol of this wasted investment.
Of course, there’s also the huge amount of graft and corruption involved. When The State is calling the shots, the “big shots” within The State enrich themselves first. After all, it’s not like their own money is at stake.
See: The California Brown-doggle know as “High Speed Rail”
Fifty-five Welkian wine *burble*
how do you say solyndra in chineser?
Can’t tell ya the Mandarin, but the translation goes “the Joneses keeping back with us”.
moo goo gay plan?
that fire needs some gasoline
Two Teens Murder Saint Louis Bosnian Visitor With Hammers – Police Do Not Release Motive…
“Soryndla.” Duh.
Related to nr’s link above.
Hmmmm…What could go wrong?
Greetings:
And here I thought it was California’s High Speed Fail !!!
Back in those ancient, semi-lost times known, in the vulgar, as ‘The 70’s’, would it not have been appropriate to describe Jerry Brown’s successful seduction of a very-willing Linda Ronstadt as a ‘High-Speed Nail’?
You realize, do you not, that it’s still George Bush’s fault!
If the teabaggers who have tied our great President’s hands had just allowed his great policies to go through, not only would we be experiencing almost unprecedented growth, China’s economy would be doing better, too.
Gosh darned Republicans!