China’s “Illusion Of Prosperity” Exposed: Forget Ghost Cities, Meet Ghost Factories | Zero Hedge.
Having exposed the 20+1 charts of China’s demise previously, we move to Exhibit (a) in the “illusion of prosperity” that keeps the dream (looking) alive to the outside (mostly Western get-rich-quick fast-money) world – China’s Zombie Factories…
“There are large numbers of companies across China that should go bankrupt but haven’t done so,” says Han Chuanhua, a bankruptcy lawyer at Zhongzi Law Office, a Beijing legal practice.
“The government doesn’t want to see bankruptcy because as soon as companies go bust, unemployment spikes and tax revenues disappear. By stopping companies from going bankrupt, officials are able to maintain the illusion of local prosperity, economic growth and stable taxes.”
Here’s Reuters from earlier last year…
