Will Collapse begin in China?
Last night, that perennial of Australian perennial TV shows, Four Corners, aired “How China Fooled the World”. I managed to sleep through most of it (chronic fatigue does this to you…), but this morning I found in on youtube (see below).
Where does one start? When you see the level of profligate consumption going on in China, you really have to wonder why anyone would bother reducing their footprint down to any level, ours included. All the energy we save here is without doubt gulped by China in a nano second….. Just one steel mill in Wuhan produces enough steel to make an Eiffel Tower every two hours… Wuhan, home to well over 10 million people three years ago is being totally rebuilt, even adding a second international airport.
The mind boggles when you start itemising some of the information from this documentary. Lending in China is simply off the charts. Just in the last five years or so, China totally duplicated the entire US financial sector that took 150 years to create. Debt rose from 10 Trillion dollars in 2008 to 25 Trillion today….. China’s current debt to GDP ratio is estimated at 200%, estimated, because no one really knows, much of the lending is done within what is known as shadow banking. The credit bubble is now growing at six times the rate of GDP. One commentator in the film states that it is impossible to grow out of this predicament. Must be the understatement of the century!
Robert Peston, the show’s presenter, is at one stage shown through the most opulent apartment I’ve ever seen, bigger than our house. It has a view, says the real estate agent, a lovely view, a very good view, across the Yangtse and to the other bank beyond…. if you can peer through the pollution of course. And the cost? $545,000….. or we are told, some 70 times the average yearly wage in the area. The result is that 15% of all this new housing is empty. The poor can’t afford them, and the rich own several.
There is no doubt China is the next big accident waiting to happen. Just when, nobody knows, but it is definitely not an if.
Goes for nearly an hour. Worth watching, if only as an educational tool….
Damn the Matrix 