Arvind Subramanian and Josh Felman have a stark warning about China in this piece for ‘Project Syndicate’. They write:
For any normal country, the build-up of extensive surplus capacity would lead to sharp declines in investment and GDP growth. And that, in turn, would produce financial distress, followed by a crisis if the warning signs were ignored. But China has had a different experience. Its GDP growth has slowed, but investment remains robust, and there is no strain on its banking system.
A simpler explanation is ‘fudged data’ makes impossible contradictions possible.
Their conclusion is unequivocal:
Sooner or later, Chinese exceptionalism will give way to the laws of economics. The world should prepare itself. The consequences could be severe – and unlike anything experienced in recent history.
This piece in WSJ on HNA selling down its stake in Deutsche Bank is worth reading because of the information it provides on extensive acquisitions that HNA had made.
The New Republic has a long piece on self-censorship in American Universities with respect to China. The practices that China adopts to induce self-censorship are very instructive and interesting.
Tail piece: Jack Ma of Alibaba is stepping down as its Executive Chairman. He is 54. Good call.