“Ghost cities”
lined with empty apartment blocks, abandoned highways and mothballed
steel mills sprawl across China’s landscape – the outcome of government
stimulus measures and hyperactive construction that have generated
$6.8tn in wasted investment since 2009, according to a report by
government researchers.
In 2009 and 2013 alone, “ineffective investment” came to nearly half the total invested in the Chinese economy in those years,
according to research by Xu Ce of the National Development and Reform
Commission, the state planning agency, and Wang Yuan from the Academy of
Macroeconomic Research, a former arm of the NDRC. But there's more. Jonathan Anderson, founder of Emerging Advisors Group, the consultancy, estimates that about $1tn has gone missing in China in the past half-decade as a result of weak oversight and the enormous opportunity provided by the investment boom. “That translates into maybe 5 per cent of GDP per year worth of skimming off the top,” he says. (From the Financial Times)
That is a lot of wasted money in an economy. But maybe the Keynesians don't see it that way.
No comments:
Post a Comment