{"id":20390,"date":"2016-05-03T19:12:38","date_gmt":"2016-05-04T00:12:38","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20390"},"modified":"2016-05-03T19:12:38","modified_gmt":"2016-05-04T00:12:38","slug":"chinas-furious-stimulus-and-debt-binge-backfires","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20390","title":{"rendered":"China\u2019s Furious Stimulus-and-Debt Binge Backfires"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/05\/01\/china-stimulus-debt-binge-falls-flat-manufacturing-service-pmi\/\">China\u2019s Furious Stimulus-and-Debt Binge Backfires<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>Fabled transition to a service economy? Forget it.<\/strong><\/p>\n<p>The export and manufacturing powerhouse of the world, the locomotive \u2013 along with the US \u2013 of the global economy, and an indicator of the global economy itself, disappointed economists once again. The operative word in the media today is\u00a0\u201cunexpectedly.\u201d<\/p>\n<p>China has been on an glorious\u00a0debt-and-stimulus binge for the past few months. New corporate borrowing shot up to record levels as the People\u2019s Bank of China opened all valves, and juice rushed through the state-owned megabanks to corporate borrowers and others all around.<\/p>\n<p>In the first quarter, total debt ballooned by 6.2 trillion yuan (nearly $1 trillion), the largest quarterly jump ever, to a record 163 trillion yuan ($25 trillion), or 237% of GDP, up from\u00a0148% of GDP in 2007, according to some of the more benign estimates. Others peg total debt as high as 282% of GDP. Corporate debt alone is now estimated at 160% of GDP. But no one knows for sure. With the Chinese economy, everyone is groping in the dark.<\/p>\n<p>It\u2019s not the debt itself that scares observers, but the speed with which this debt has ballooned. It\u2019s impossible to invests this sort of moolah this quickly in productive activities whose proceeds would allow for this debt to be serviced [read\u2026\u00a0\u00a0<a href=\"http:\/\/wolfstreet.com\/2016\/04\/25\/chinas-lehman-moment-or-decades-of-japan-style-stagnation-debt-to-gdp\/\" target=\"_blank\">China\u2019s \u201cLehman Moment\u201d or Decades of Japan-Style Stagnation?<\/a>].<\/p>\n<p>Economists thought that this stimulus-and-debt binge would actually perk up manufacturing, boost services, and end China\u2019s economic malaise, the extent of which remains unknown because no one, not even the Chinese leadership, trusts the official numbers according to which the economy grew 6.7% in the first quarter. Inflated as that number may be, it\u2019s the slowest growth since 2009.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>China\u2019s Furious Stimulus-and-Debt Binge Backfires Fabled transition to a service economy? Forget it. The export and manufacturing powerhouse of the world, the locomotive \u2013 along with the US \u2013 of the global economy, and an indicator of the global economy itself, disappointed economists once again. The operative word in the media today is\u00a0\u201cunexpectedly.\u201d China has [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[130,195,9456,512,12652,1234,827,4254,4255],"class_list":["post-20390","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-debt","tag-gap","tag-media","tag-service-economy","tag-stimulus","tag-united-states","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20390","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20390"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20390\/revisions"}],"predecessor-version":[{"id":20391,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20390\/revisions\/20391"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}