We’ve been saying the numbers weren’t to be trusted in China for years. (We certainly weren’t the only ones.) Looks like the world is also coming to this realization, or more likely is just acknowledging that the jig is up. Or maybe both. Whatever, we hope that you had a good ride if you were investing in China on the long side, and hope that you saw the writing on the ghost city walls before things got ugly.
The Chinese have poured stimulus on top of stimulus already. An archipelago of idiot central planning projects stretches from the Ordos desert in the north to the lush mountains in the south. High rises reach to the sky but are empty, in the middle of cities which are empty, in a country which is anything but empty.
This is a great example of why the government should never manage the economy. The more government manages, the more it will mess things up. Over time this is nearly always true. It is absolutely true in China.
This guy is something else. Take a look at the above picture taken when business leaders reported to the White House in the wake of Obama’s victory. Look at Obama’s face.
How can America compete with China’s subsidized industries in the 21st Century? Surely we will be left behind and the Red Dragon will come back to swallow us into its state-capitalism fed belly.