Tuesday, Aug 25, 2009
The Year of the Green Span
Financial Times: Rule of the Iron Rooster
Those impressive-looking numbers for the Chinese economy result from creative accounting and unprecedented and unsustainable credit creation, much of it mainlined into stock and property markets, and most of the rest into ridiculous infrastructure projects that create relatively few jobs and will end up as bad loans. Small/medium enterprises are losing out, private sector wages are low and private employers who can get loans are just buying bubbly financial assets. There is a huge premium on getting a government job and much bribery is involved in getting one. If you want a picture of the nature of the global "recovery" just take a look at the Chinese "recovery".
Posted by icarus @ 12:23 PM (427 views) Add Comment
6 Comments
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1. icarus said...
If you can't see the whole article, just google: rule of the iron rooster ft
It's the first result on google.co.uk
2. Ndg said...
Dear oh dear. UK and USA wipe out the value of the future by questionable government donations to the banks. As do quite a few other nations. They've been doing it for some time. I think Zimbabwe started it.
Meanwhile China - as willing counter-party to the export goods to USA / import USA government debt in some kind of a weird trade balance - is left to squander billions of 'stimulus' money to build more factories to produce more and more widgets. Must keep those idle hands busy. And all the while the 'big picture' mandarins must be wondering when (if ever) the Baltic Dry Index will crank up from it's current dying wheeze.
Oh the joy of un-joined-up-thinking. Such bliss. What a hoax.
3. bellwether said...
Thought this was a useful idea in trying to understand the difficulties China faces -
“An authoritarian, centralised state cannot tolerate alternative centres of power,” says one well-connected Chinese businessman. “Until we have meaningful political reform in China, we’ll never be able to overcome these issues and our economy will not be able to move on to the next stage of development.”
4. icarus said...
One guy gets Rmb70 for a 10-hour day, another has to pay Rmb100,000 to get a job in a bureau of the railway ministry. Hmmm
5. new user 2007 said...
Rmb70 per day works out to around Rmb25,000 per year (many work most days of the week). This is one of the most menial jobs, so someone working in a government ministry probably earns at least twice as much. As the government job is more secure, the bribe is probably at a reasonable rate?
6. icarus said...
@5 - So two years' salary to land a job is about right? It's a market price, so who can argue? I think the point is that it's a bribe-ridden economy where government jobs ARE far better paid and more secure, and the question becomes - where does that take China in the future?