Monday, July 09, 2012

Ray LaHood and the Chinese

Attention Secretary LaHood:  about that Chinese central planning prowess.  Via the BBC last month….

In 2008, in response to the global financial crisis and imminent recession, the Chinese government announced a massive $590bn spending splurge over the next two years.

It did the trick - China's growth rate barely dropped below the magic 10% figure at a time when the West fell into its deepest recession since World War II.

A lot of that money poured into infrastructure - new roads, bridges and airports.

But, just as with the housing boom, China may have overstretched itself.

For example, China has built the world's biggest high-speed rail network, five times the size of France's TGV, from scratch.

But most Chinese cannot afford the train tickets. And the regular trains that they can afford have actually become less frequent as they make room for the shiny new high-speed trains.

And it seems the lines were built in too much of a rush - a string of dangerous incidents, including a major train crash at Wenzhou, have been blamed on poor design and shoddy building work.

BBC News - Has China's economy run out of steam?

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