1/5
Interesting and important article. For years analysts have argued – and some still argue – that Chinese public-sector investment, including the rapid expansion of its railway system, remains productive and good for China’s economy.
scmp.com/economy/china-…
Interesting and important article. For years analysts have argued – and some still argue – that Chinese public-sector investment, including the rapid expansion of its railway system, remains productive and good for China’s economy.
scmp.com/economy/china-…
2/5
But if that’s the case, why would Beijing worry about the associated debt, and why sharply reduce its plans to expand mileage in favor of trying to “to maximise the benefits of its massive existing rail”? If this spending had been productive all along, financing it with...
But if that’s the case, why would Beijing worry about the associated debt, and why sharply reduce its plans to expand mileage in favor of trying to “to maximise the benefits of its massive existing rail”? If this spending had been productive all along, financing it with...
3/5
debt wouldn’t matter because the debt would have grown by less than the capacity to service the debt (for which GDP is supposed to be a proxy). The associated debt wouldn’t be a problem at all.
Clearly Beijing understands – perhaps a little late – that while all of this...
debt wouldn’t matter because the debt would have grown by less than the capacity to service the debt (for which GDP is supposed to be a proxy). The associated debt wouldn’t be a problem at all.
Clearly Beijing understands – perhaps a little late – that while all of this...
4/5
activity is boosting economic activity and reported GDP, it is not boosting the real productive capacity of the economy. The fact that it has been so difficult for them to recognize and resolve the problem makes me pessimistic about their ability to rebalance growth. Most...
activity is boosting economic activity and reported GDP, it is not boosting the real productive capacity of the economy. The fact that it has been so difficult for them to recognize and resolve the problem makes me pessimistic about their ability to rebalance growth. Most...
5/5
analysts understand that a rebalanced economy will allow China to rely less on non-productive investment, but few seem to understand why it will be very hard to rebalance growth without FIRST sharply reducing non-productive investment.
analysts understand that a rebalanced economy will allow China to rely less on non-productive investment, but few seem to understand why it will be very hard to rebalance growth without FIRST sharply reducing non-productive investment.
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