Tuesday, August 25, 2009
The Year of the Green Span
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".