{"id":36997,"date":"2018-08-23T18:53:08","date_gmt":"2018-08-23T23:53:08","guid":{"rendered":"http:\/\/olduvai.ca\/?p=36997"},"modified":"2018-08-23T18:53:08","modified_gmt":"2018-08-23T23:53:08","slug":"new-reality-of-chinas-failing-economy-is-coming-soon","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=36997","title":{"rendered":"New Reality of China\u2019s Failing Economy Is Coming Soon"},"content":{"rendered":"
\n
\"New<\/div>\n<\/div>\n
\n
\n
\n
\n
<\/div>\n<\/div>\n
\n

New Reality of China\u2019s Failing Economy Is Coming Soon<\/a><\/h3>\n

I\u2019ve written for years that Chinese economic development is partly real and partly smoke and mirrors, and that it\u2019s critical for investors to separate one from the other to make any sense out of China and its impact on the world.<\/p>\n

My longest piece on this topic was Chapter Four of my second book, The Death of Money<\/em> (2014), but I\u2019ve written much else besides, including many articles for my newsletters.<\/p>\n

There\u2019s no denying China\u2019s remarkable economic progress over the past thirty years. Hundreds of millions have escaped poverty and found useful employment in manufacturing or services in the major cities.<\/p>\n

Infrastructure gains have been historic, including some of the best trains in the world, state-of-the-art transportation hubs, cutting edge telecommunications systems, and a rapidly improving military.<\/p>\n

Yet, that\u2019s only half the story.<\/p>\n

The other half is pure waste, fraud and theft. About 45% of Chinese GDP is in the category of \u201cinvestment.\u201d A developed economy GDP such as the U.S. is about 70% consumption and 20% investment.<\/p>\n

There\u2019s nothing wrong with 45% investment in a fast-growing developing economy assuming the investment is highly productive and intelligently allocated.<\/p>\n

That\u2019s not the case in China. At least half of the investment there is pure waste. It takes the form of \u201cghost cities\u201d that are fully-built with skyscrapers, apartments, hotels, clubs, and transportation networks \u2013 and are completely empty.<\/p>\n

This is not just western propaganda; I\u2019ve seen the ghost cities first hand and walked around the empty offices and hotels.<\/p>\n

Chinese officials try to defend the ghost cities by claiming they are built for the future. That\u2019s nonsense. Modern construction is impressive, but it\u2019s also high maintenance. Those shiny new buildings require occupants, rents and continual maintenance to remain shiny and functional. The ghost cities will be obsolete long before they are ever occupied.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

New Reality of China\u2019s Failing Economy Is Coming Soon I\u2019ve written for years that Chinese economic development is partly real and partly smoke and mirrors, and that it\u2019s critical for investors to separate one from the other to make any sense out of China and its impact on the world. My longest piece on this […]<\/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":[130,13599,21387],"class_list":["post-36997","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-james-rickards","tag-the-daily-reckoning"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36997","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=36997"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36997\/revisions"}],"predecessor-version":[{"id":36998,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36997\/revisions\/36998"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36997"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36997"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36997"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}