In fact, China is a grotesque economic aberration that bears no relationship to prior economic history or any conventional economic models-–not even to the export-mercantilism model originally developed by Japan, and which has now proven itself wholly unsustainable.
Instead, China is a nation that has gone mad building,speculating and borrowing on the back of a credit bubble so monumental (and dangerously unstable) that its implications are resolutely ignored by observers deluded by the notion that China embodies a unique economic model called “red capitalism”.
But when a nation’s debt outstanding explodes from $1 trillion to $25 trillion in 14 years, that’s not capitalism, even if its red.
What it represents is monetary madness driven by the state.
Occasionally a picture is worth a thousand words, and here’s one buried in a Financial Times story on China’s rapidly deteriorating housing market.
It seems that during the two-year period 2011-2012, which was the peak of China’s much praised “aggressive” stimulus response to the Great Recession in the DM world, China consumed more cement than did the United States during the entire 20th century!
No comments:
Post a Comment