Some day China is going to crack open like Humpty Dumpty. Some day, all the games the Chinese play with their economy, with their currency, with their officials statistics, with their populace, are going to come unglued.
We have previously alerted you to the fact that even senior Chinese officials acknowledge in private that the countries GDP numbers are not to be trusted. Now, a former senior executive at the People’s Bank has published a scathing indictment of the economy and leadership, in a state-controlled publication no less.
“China’s rapid growth has been achieved at an extremely high cost. Only future generations will know the true price,” Mr Yu wrote in an opinion piece published in the state-controlled China Daily. “[China’s] growth pattern has now almost exhausted its potential. So China has reached a crucial juncture: without painful structural adjustments the momentum of its economic growth could suddenly be lost.”
The “miracle” that is the Chinese economy is being engineered in almost the exact same manner as the recovery in the U.S. The only difference is you’ll never get U.S. officials to admit they’re central planners. Granted that’s hyperbole. U.S. officials don’t go around ordering banks to make loans, and construct entire cities that sit empty. Both both have chosen the essential path of throwing money at a problem, rather than trying to resolve it and move on.
More from the FT article:
“Some local governments are literally digging holes and then filling them in to ratchet up the GDP,” Mr Yu wrote. “Consequently, there are simply too many luxurious condominiums, magnificent government office buildings and soaring skyscrapers.”