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The Secret to China's GDP Growth: If You Build It, Nobody Comes

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November 24, 2009 – Comments (4)

The government can build you a city, but you might not want to live there or need to move there.  So then what?  You have tremendous government spending... "why spend trillions when you can spend billions?" says Dr. Evil....  and an empty city to show for it.  You can record the spending in your GDP numbers, share it with your huddled technocrats who massage every figure, put up pretty charts and graphs for the media, who in turn spend hours debating just how successful it was.  When the economy falters again, they can argue if more spending was needed.  The public eats it all up.  Well, everything except the stuff government produced for them.

Meanwhile the city you built is empty.

David in Qatar

4 Comments – Post Your Own

#1) On November 24, 2009 at 11:24 AM, TMFBent (99.81) wrote:

David, are you saying that China's fudging its numbers? ;)

It's a simple prescription that seems to include both top-line fudging (counting pledged money as GDP even before it's been spent, report car sales when cars come out of the factory -- rather than when they move off a lot) and manipulation (or ignoring) inconvenient indicators such as return on invested capital.

Thanks for sharing the video.

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#2) On November 24, 2009 at 11:25 AM, nzsvz9 (< 20) wrote:

David,

The United States has roughly 300 million citizens and has a GDP of about 14 trillion dollars.

China has roughly 1.3 billion citizens and has a GDP of about 8 trillion dollars.

Almost 8 times. There is no equit or parity in these figures. As one of the leaders of the company said "How do you keep more than a billion people from revolting? Keep the economy growing at 10% a year." From a man who has been there - often. Their economy would need to be a 61 trillion dollar economy to be close. That's 20 years away - if we don't grow in the meantime, providing they continue - and the growth is real, not 'forced' as the video suggests is sometimes the case.

How long until the "Perestroika-zation of China" fails as it did in the Soviet Union? Your video would seem to by symptomatic of the pressures of continued growth - and the strange dissonance the people feel and see living in the shadow of a gleaming city - which is empty.

My parents' generation prayed for the conversion of the Soviet Union - and although there are authoritarian dealings going on there, it is not as it once was - nor for the peoples of eastern Europe. How then should one address China?

Known in China as nzsvz(jiu)

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#3) On November 24, 2009 at 12:05 PM, whereaminow (20.69) wrote:

TMFBent,

haha, nice!  And I wish we hadn't had our little spats here and there.  We have more in common than differences.

nzsvz9,

Tun da do ha!  (I made that up.)  That's how I would address China.

Um, you wanted a serious answer though.  But honestly it is probably the area of the world I know the least about, outside of reading Sun Tzu.  That doesn't qualify me to understand the Chinese people.  But I do understand governments, so I know the Chinese communists aren't going away any time soon.

David in Qatar

 

 

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#4) On November 24, 2009 at 3:09 PM, starbucks4ever (97.20) wrote:

Don't worry, the city will fill up eventually. Someone will need to lower the apartment prices, and it will be a good thing too.

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