glenn1
Lifer
From the Washington Post today no less.... could China be the next big player on the world economic scene to implode and cause a crisis, similar to Mexico a few years ago, or the "Asian contagion" of 1998?
Story link
According to the Financial Times of London, Chinese Premier Zhu Rongji recently told a television audience in his country that the Chinese economy would have "collapsed" in 1998 without the state stimulus spending that is currently taking Beijing's government debt to record-high levels. Zhu Rongji is someone who chooses his words carefully, which makes the term "collapse" alarming, although not perhaps, in retrospect, surprising.
Officially, China has for some time been claiming growth rates of 7 percent or more. But information casting doubt on those figures has long been available. Visitors see lots of rural people camped out at urban railroad stations or on sidewalks: Clearly they have nothing to do where they come from, or where they have arrived. Block after block of abandoned construction projects in cities suggest someone has run out of money (as does the recent proposal that money be raised for the Three Gorges Dam by selling stock). Almost daily protests by workers, many violent, are also a clue that all is not well.
Moreover, even the official figures don't make sense: How can it be that energy use is falling in a booming economy? And unemployment rising (as the official statistics show)? This is unprecedented in economic history. Finally, the state borrowing for pump priming to which Premier Zhu refers has always been public knowledge. Why, if the economy is burning up the track, has stimulus been necessary?
Once again Chinese officialdom has put one over on Western observerdom. The shining exception is Prof. Thomas Rawski of the University of Pittsburgh, who over the past year or so has been making thoroughly empirical and highly persuasive presentations across the United States on China's economy, based entirely on open Chinese sources, comparisons with other fast-growing economies and some solid economic analysis. He argues that China's economy may actually have been contracting since 1998.
Story link
According to the Financial Times of London, Chinese Premier Zhu Rongji recently told a television audience in his country that the Chinese economy would have "collapsed" in 1998 without the state stimulus spending that is currently taking Beijing's government debt to record-high levels. Zhu Rongji is someone who chooses his words carefully, which makes the term "collapse" alarming, although not perhaps, in retrospect, surprising.
Officially, China has for some time been claiming growth rates of 7 percent or more. But information casting doubt on those figures has long been available. Visitors see lots of rural people camped out at urban railroad stations or on sidewalks: Clearly they have nothing to do where they come from, or where they have arrived. Block after block of abandoned construction projects in cities suggest someone has run out of money (as does the recent proposal that money be raised for the Three Gorges Dam by selling stock). Almost daily protests by workers, many violent, are also a clue that all is not well.
Moreover, even the official figures don't make sense: How can it be that energy use is falling in a booming economy? And unemployment rising (as the official statistics show)? This is unprecedented in economic history. Finally, the state borrowing for pump priming to which Premier Zhu refers has always been public knowledge. Why, if the economy is burning up the track, has stimulus been necessary?
Once again Chinese officialdom has put one over on Western observerdom. The shining exception is Prof. Thomas Rawski of the University of Pittsburgh, who over the past year or so has been making thoroughly empirical and highly persuasive presentations across the United States on China's economy, based entirely on open Chinese sources, comparisons with other fast-growing economies and some solid economic analysis. He argues that China's economy may actually have been contracting since 1998.
