10:26AM
Chart(s) of the day: The Chinese economic "miracle" of past decade
Friday, June 8, 2012 at 10:26AM 
From the Economist.
In a nutshell, it ain't their growing domestic consumption and it isn't their current account surplus (exporting prowess - see below), it's the amount of public investment. And as the lower right (above) chart shows, China is revving that particular supply-side motor a lot higher than either Japan or South Korea did.
All of this is to say: nothing miraculous here. And no endless linear rocket upward either.
Reader Comments (1)
I'm back in West Qinghai Province. The new highway connecting the city of 200K to the Salt Lake Potash Factory is now in. Rather than a very bumpy 1 hour, you can now get to the factory in 40 minutes and not feel beat up when you arrive. Problem is is that very few people take the highway. The highway toll is 20 RMB (about USD 3) vrs 5 RMB for the weathered old road (USD 75 cents.) For most people, more comfort and 20 minutes are not worth 15 RMB (USD 2.25), even in shared taxis. The Salt mine/potash factory employee bus with 30 workers or so per bus doesn't even take the highway. (For them it would be RMB 50 vrs RMB 10 and around 35 minutes time savings, as they can't go very fast on the old road.)
Another thing I notice is that in Xining, the capital of Qinghai Province, the empty buildings are all still there, it's just that now they are surrounding by even more buildings under construction. There's no way that more than a fraction of these buildings will ever be occupied.
This kind of mal-investment is common throughout China and is why I think a debt crisis is coming at some point. There is way too much investment being directed by the government into project that will never make a return. Unlike in the past where deposit growth and an ever expanding export base could bail out the banks, China will at some point have to face the consequences of these issues.