S*****s
发帖数: 7520 | 1 Will China shake the world again?
COMMENTS (455)
China's exceptional growth has been fuelled by massive debt and government s
ubsidies as Robert Peston reports from Wuhan
More from Robert
Who loses from punishing Russia?
Is Standard Life alone?
Standard Life could quit Scotland
Co-op to report worst results in history
Unless you are an aficionado of the great moments of Chinese Communist histo
ry, you probably won't have heard of Wuhan (it is the site of Chairman Mao's
legendary swim across the Yangtze).
But perhaps more than any other Chinese city, it tells the story of how Chin
a's remarkable three decades of modernisation and enrichment, its economic m
iracle, is apparently drawing to a close, and why there is a serious risk of
a calamitous crash.
In Wuhan I interviewed a mayor, Tang Liangzhi, whose funds and power would m
ake London's mayor, Boris Johnson, feel sick with envy. He is spending ￡200
bn over five years on a redevelopment plan whose aim is to make Wuhan - whic
h already has a population of 10 million - into a world mega city and a seri
ous challenger to Shanghai as China's second city.
The rate of infrastructure spending in Wuhan alone is comparable to the UK's
entire expenditure on renewing and improving the fabric of the country. In
this single city, hundreds of apartment blocks, ring roads, bridges, railway
s, a complete subway system and a second international airport are all being
constructed.
The middle of town is being demolished to create a high tech commercial cent
re. It will include a ￡3bn skyscraper that will be more than 600m high (rou
ghly double the height of London's Shard) and either the second or third tal
lest in the world (I met executives of the state owned developers, Greenland
, who were coy about precisely how tall it would finally be).
And, of course, the point of my visit to Wuhan was to tell a broader story.
Over the past few years, China has built a new skyscraper every five days, m
ore than 30 airports, metros in 25 cities, the three longest bridges in the
world, more than 6,000 miles of high speed railway lines, 26,000 miles of mo
torway, and both commercial and residential property developments on a mind-
boggling scale.
Third wave
Now there are two ways of looking at a remaking of the landscape that would
have daunted Egypt's pharaohs and the Romans. It is, of course, a necessary
modernisation of a rapidly urbanising country. But it is also symptomatic of
an unbalanced economy whose recent sources of growth are not sustainable.
“
Start Quote
When a big economy is investing at that pace to generate wealth and jobs, it
is a racing certainty that much of it will never generate an economic retur
n”
Perhaps the big point of the film I have made, to be screened on Tuesday (Ho
w China Fooled the World, BBC2, 9pm) is that the economic slowdown evident i
n China, coupled with recent manifestations of tension in its financial mark
ets, can be seen as the third wave of the global financial crisis which bega
n in 2007-08 (the first wave was the Wall Street and City debacle of 2007-08
; the second was the eurozone crisis).
Why do I say that?
Well in the autumn of 2008, after the collapse of Lehman, there was a sudden
and dramatic shrinkage of world trade. And that was catastrophic for China,
whose growth was largely generated by exporting to the rich West all that s
tuff we craved. When our economies went bust, we stopped buying - and almost
overnight, factories turned off the power, all over China.
I visited China at the time and witnessed mobs of poor migrant workers packi
ng all their possessions, including infants, on their backs and heading back
to their villages. It was alarming for the government, and threatened to sm
ash the implicit contract between the ruling Communist Party and Chinese peo
ple - namely, that they give up their democratic rights in order to become r
icher.
So with encouragement from the US government (we interviewed the then US Tre
asury Secretary, Hank Paulson), the Chinese government unleashed a stimulus
programme of mammoth scale: ￡400bn of direct government spending, and an in
struction to the state-owned banks to "open their wallets" and lend as if th
ere were no tomorrow.
A farmer shovels soil at a vegetable field near a new residential compound o
n the outskirts of Wuhan
The lending boom led to a huge increase in construction
Which, in one sense, worked. While the economies of much of the rich West an
d Japan stagnated, boom times returned to China - growth accelerated back to
the remarkable 10% annual rate that the country had enjoyed for 30 years.
But the sources of growth changed in an important way, and would always have
a limited life.
Toxic investment
There are two ways of seeing this.
First, even before the great stimulus, China was investing at a faster rate
than almost any big country in history.
“
Start Quote
Anyone living in the rich West does not need a lecture on the perils of a fi
nancial system that creates too much credit too quickly”
Before the crash, investment was the equivalent of about 40% of GDP, around
three times the rate in most developed countries and significantly greater e
ven than what Japan invested during its development phase - which preceded i
ts bust of the early 1990s.
After the crash, thanks to the stimulus and the unleashing of all that const
ruction, investment surged to an unprecedented 50% of GDP, where it has more
or less stayed.
Here is the thing: when a big economy is investing at that pace to generate
wealth and jobs, it is a racing certainty that much of it will never generat
e an economic return, that the investment is way beyond what rational decisi
on-making would have produced.
That is why in China, there are vast residential developments and even a who
le city where the lights are never on and why there are gleaming motorways b
arely tickled by traffic.
But what makes much of the spending and investment toxic is the way it was f
inanced: there has been an explosion of lending. China's debts as a share of
GDP have been rising at a very rapid rate of around 15% of GDP, or national
output, annually and have increased since 2008 from around 125% of GDP to 2
00%.
The analyst Charlene Chu, late of Fitch, gave a resonant synoptic descriptio
n of this credit binge:
Find out more
Chinese people
BBC business editor Robert Peston travels to China to investigate how this m
ighty economic giant could actually be in serious trouble.
Watch This World: How China Fooled the World - with Robert Peston on BBC Two
at 21:00 on Tuesday, 18 February.
Or catch it later on the BBC iPlayer.
"Most people are aware we've had a credit boom in China but they don't know
the scale. At the beginning of all of this in 2008, the Chinese banking sect
or was roughly $10 trillion in size. Right now it's in the order of $24 to $
25 trillion.
"That incremental increase of $14 to $15 trillion is the equivalent of the e
ntire size of the US commercial banking sector, which took more than a centu
ry to build. So that means China will have replicated the entire US system i
n the span of half a decade."
Anyone living in the rich West does not need a lecture on the perils of a fi
nancial system that creates too much credit too quickly. And in China's case
, as was dangerously true in ours, a good deal of the debt is hidden, in spe
cially created, opaque and largely financial institutions which we've come t
o call "shadow" banks.
There are no exceptions to the lessons of financial history: lending at that
rate leads to debtors unable to meet their obligations, and to large losses
for creditors; the question is not whether this will happen but when, and o
n what scale.
Which is why we've seen a couple of episodes of stress and tension in China'
s banking markets over the past nine months, as a possible augury of worse t
o come.
Slowing growth
More broadly, for the economy as a whole, when growth is generated over a lo
ngish period by debt-fuelled investment or spending, there can be one of two
outcomes.
If the boom is deflated early enough and in a controlled way, and measures a
re taken to reconstruct the economy so that growth can be generated in a sus
tainable way, the consequence would be an economic slowdown, but disaster wo
uld be averted.
But if lending continues at breakneck pace, then a crash becomes inevitable.
So what will happen to China's economic miracle?
Well, the Chinese government has announced economic reforms, which - in theo
ry - would over a period of years rebalance the economy away from debt-fuell
ed investment towards consumption by Chinese people.
Charles Liu, a prominent Chinese investor, with close links to the governmen
t in Beijing, explained to me how far China's growth rate is likely to fall
from the current 7-8%:
"I think China could do very well if the quality of the growth is transforme
d to higher value add." He said. "You're really looking at 4% is fine."
But as yet the reforms are at a very early stage of implementation, and the
lending boom goes on. What is more, the current building splurge so enriches
many thousands of communist officials, from a system of institutionalised k
ickbacks, that there are concerns about the ability of the central governmen
t to force the changes through.
Also, the social and political consequences of Charles Liu's 4% growth could
be profound: it is unclear whether that is a fast enough rate to satisfy th
e people's hunger for jobs and higher living standards, whether it is fast e
nough to prevent widespread protest and unrest.
And what if the lending and investing bonanza can't be staunched? Then we wo
uld be looking at the kind of crash that would shake not just China, but the
globe.
The biggest story of my career has been the rise and rise of China. Hungry,
fast-growing China has shaped our lives, sometimes but not always to our ben
efit.
It boosted our living standards, by selling us all those material things we
simply had to have, cheaper and cheaper. But its exporters killed many of ou
r manufacturers. And the financial surpluses it generated translated into ou
r dangerous deficits, the secular and risky rise of indebtedness in much of
the West.
Also its appetite has led to huge increases in the price we all pay for food
, for energy, for commodities. What's more, China's influence in Asia and Af
rica has profoundly shifted the global balance of power.
So would an economically weakened China be good for us in the West? Well, it
wouldn't necessarily be all bad.
But a China suddenly incapable of providing the rising living standards its
people now see as their destiny would be less confident, less stable, and -
perhaps for the world - more dangerous. | l*****i
发帖数: 20533 | | n*****8
发帖数: 19630 | | L***s
发帖数: 2944 | 4 逼逼洗又在造谣。。。
s
histo
【在 S*****s 的大作中提到】
: Will China shake the world again?
: COMMENTS (455)
: China's exceptional growth has been fuelled by massive debt and government s
: ubsidies as Robert Peston reports from Wuhan
: More from Robert
: Who loses from punishing Russia?
: Is Standard Life alone?
: Standard Life could quit Scotland
: Co-op to report worst results in history
: Unless you are an aficionado of the great moments of Chinese Communist histo
| k******y
发帖数: 773 | 5 看到BBC的崩溃震惊我对中国经济又放心了
s
histo
★ 发自iPhone App: ChineseWeb 7.8
【在 S*****s 的大作中提到】
: Will China shake the world again?
: COMMENTS (455)
: China's exceptional growth has been fuelled by massive debt and government s
: ubsidies as Robert Peston reports from Wuhan
: More from Robert
: Who loses from punishing Russia?
: Is Standard Life alone?
: Standard Life could quit Scotland
: Co-op to report worst results in history
: Unless you are an aficionado of the great moments of Chinese Communist histo
| w*********g
发帖数: 30882 | 6 喊了二十年了。就算是喊“狼来了”的放羊娃，现在也是正经琐男，懂得不该胡乱放空
炮了。 | a**i
发帖数: 152 | 7 我靠！中国又崩溃了，比俺家小宝pupu的频率还高。我一天得给他换好几回diapper，
洗屁屁，弄得我累死了。 | x******g
发帖数: 33885 | 8 说明洋人就是白痴
【在 a**i 的大作中提到】
: 我靠！中国又崩溃了，比俺家小宝pupu的频率还高。我一天得给他换好几回diapper，
: 洗屁屁，弄得我累死了。
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