China finally realizes that high speed trains and skyscrapers don't generate jobs.

[touchring]

http://www.nytimes.com/2013/06/17/bu...anted=all&_r=0

After razing down farmlands, historical neighborhoods and spending trillions of dollars on skyscrapers and high speed trains, the Chinese realize that white elephants don't generate jobs.

Are we seeing a recurrence of Mao's wasteful and disastrous industrial experiments in the 1960s but on an even larger scale?

[metalman]

Re: China finally realizes that high speed trains and skyscrapers don't generate jobs.

http://www.nytimes.com/2013/06/17/bu...anted=all&_r=0

After razing down farmlands, historical neighborhoods and spending trillions of dollars on skyscrapers and high speed trains, the Chinese realize that white elephants don't generate jobs.

Are we seeing a recurrence of Mao's wasteful and disastrous industrial experiments in the 1960s but on an even larger scale?

gee... central planned 'capitalist' economy no worky?

who could have known?

[touchring]

Re: China finally realizes that high speed trains and skyscrapers don't generate jobs.

gee... central planned 'capitalist' economy no worky?

who could have known?

Too much credit? The US can't claim number one for that.

Overall credit has jumped from $9 trillion to $23 trillion since the Lehman crisis. "They have replicated the entire US commercial banking system in five years," she said.

The ratio of credit to GDP has jumped by 75 percentage points to 200pc of GDP, compared to roughly 40 points in the US over five years leading up to the subprime bubble, or in Japan before the Nikkei bubble burst in 1990. "This is beyond anything we have ever seen before in a large economy. We don't know how this will play out. The next six months will be crucial," she said.

http://www.businessinsider.com/fitch...-record-2013-6

[charliebrown]

Re: China finally realizes that high speed trains and skyscrapers don't generate jobs.

If we use 8T as China GDP, and 23T in credit, this results in 2.9x Debt/GDP ratio.
U.S. is 59T debt and 16T GDP we proudly have a ratio of 3.68. I don't think we can compare the the ratios as apples to apples.
Confidence in credit markets, political stability, trade balance, demographics etc will weigh on the credit markets tolerance of what is too much debt.

I do not have the figures of debt to GDP for the U.S. in 2007/2008
According to the Economist, U.S. 2007 ratio for the U.S. was 3.40 and Sept. 2011 U.S. was 3.32.
My numbers for Sept 2011, are U.S. 3.60. I don't know whoose numbers are more correct.