长春冬天盖多厚的被子:China's Economic Miracle Is About To Derail?

来源：百度文库编辑：九乡新闻网时间：2024/04/29 00:28:34

China's Economic Miracle Is About To Derail?

In the debate of recent high-speed rail derail tragedy in Wenzhou, China, Jeremy Warner sees the "derail scene" of the Chinese economic development model. The question is - is it too early to criticize the whole high-speed project and Chinese economic model?

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2011-7-30 14:48

Last weekend, one of China's new bullet trains rammed into the back of another, killing 39 passengers and injuring nearly 200 more. Photo: AP

Jeremy Warner

Largely invisible to a radar screen dominated by concerns over the US and eurozone debt crises, the Chinese economic miracle, one of the few apparent bright spots that remains in a world beset by trouble, has in recent weeks also been showing unnerving signs of strain. Indeed, it may even be about to come off the rails entirely – quite literally.

Last weekend, one of China's new bullet trains, a showcase of the country's growing economic prowess has raised questions, not just about the safety of China's vaunting ambition in high-speed rail, but about the sustainability of the country's break-neck pace of economic development in the round.As Shen Minggao, chief China economist at Citi, has observed: "High-speed rail in some sense represents China's fast growth. When you care so much about speed, you sometimes pay less attention to the quality of the growth."

China's political leadership has long dreamt of an entirely new rail network, from the prosperous eastern seaboard to remotest inland China, and over the past four years they've set about building it with a determination which no other country would seem remotely capable of.But in so doing, they appear to have put speed before safety, and economic ambition before commercial viability.

The funding of this grand ambition is beginning to look increasingly shaky too. Financially, the project has already effectively broken the Ministry of Railways. At the last count, the ministry was nearly 2 trillion yuan (£200bn) in debt and clocking up losses at the rate of about £400m a quarter. On any Western definition, the ministry is completely bust. To meet the plan, another 2.8 trillion yuan has to be found in the next three and half years. Where's the money going to come from? Concern over the new network's safety has created an even bigger hill to climb in terms of driving the necessary demand. Many of the trains are as empty as the ghost towns that sprout randomly upon China's vast open plains. For many Chinese, both are too expensive to contemplate.

The Chinese approach to development is to build the infrastructure in the expectation that the demand and economic activity will naturally follow in its wake. Yet in its impatience for economic advancement, China has ignored the dangers and cut corners. Last weekend's rail crash can be seen as a harbinger of wider economic catastrophe to come.As everyone knows, progress never proceeds in a straight line, yet when it comes to China, many have managed to deceive themselves that it can and will. No one is more guilty of this delusion than the Chinese themselves. The swagger and arrogance of Chinese officialdom has all the hallmarks of pride before the fall. China is on a treadmill of unsustainable development which it knows not how to get off without damaging growth and thereby provoking political and social instability.

For a long time now, the Chinese leadership has been conscious of the economy's dangerously high reliance on investment and net trade to fuel growth. Economic and financial calamities in the West have convinced policy-makers of the need to move more swiftly than they would have liked to address these imbalances.Yet despite the rhetoric, the country has failed appreciably to wean itself off the dependence. Domestic consumption still accounts for a woefully small proportion of the economy. In the round, public policy still overwhelmingly prioritises investment and exports over higher disposable incomes.

The longer China takes to make the switch, the more likely it is that China's present phase of investment-led growth will end badly. In high-speed rail along with much else, China is trying to run before she has properly learned to walk. Rampant corruption, cronyism and poor governance only add to concern over the sustainability of the present economic and social model.So when China lectures the US on its absence of economic leadership and the suicidal tendencies the world's richest nation is displaying in putting political infighting before the interests of financial stability, it perhaps ought to look to the mote in its own eye.

China, one of the poorest countries in the world, has in effect been lending the US, the richest, the money with which to buy its goods. How stupid is that? Debasement of the vast dollar assets China has accumulated in the process is the least it can expect by way of payback for a flawed economic model.

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