"You have to go back to the Asian currency crisis of 1997-1998 to understand today's slowdown [in China]. China's leaders knew they had to continue modernizing; even simple things like roads and sewer systems were still lacking. They had watched neighbors South Korea and Thailand and Malaysia go under and crash their currencies trying to pay back massive dollar-denominated debt used to upgrade their own infrastructure. So instead of borrowing from abroad, China’s leaders encouraged workers to emphasize saving over shopping, which helped build more housing, highways, airports and trains.
"Sure enough, China’s savings rate rose from 32% of GDP in 1980 to 50% today. Investment followed a similar trend. Household consumption dropped from 70% of GDP in 1962 to 50% in 1980 to around 35% today (it is 70% in the US). That’s how you self-fund a build-out.
"And it worked. According to Canadian analyst Vaclav Smil, China churned out more concrete in three years (2011-14) than the US did in the entire 20th century. Aging Hutong residences are disappearing, replaced by 50-story high-rise apartments—many of which stand empty. To fund all this, China is 106th globally in household consumption at $3,900 per capita, behind Swaziland but ahead of Algeria—and about 10% of the figure for the US.
My comment:
(a) There is no need to read the rest.
(b) introduction of the author at the end of the op-ed: "Mr Kessler, a former hedge-fund manager, is the author of 'Eat People" (Portfolio, 2011).
(c)
(i) In culture, a hinge point is a turning point.
(ii) in science and engineering:
Robert J Twiss and Eldridge M Moores, Structural Geology. New York City: WH Freeman & Co, 1992, at pages 220-221 https://books.google.com/books?i ... inition&f=false
(d) Washington Post columnist George Will mentioned two weeks ago that "China churned out more concrete in three years (2011-14) than the US did in the entire 20th century," quoting Hank Paulson's book. Now we know who the source was.
Vaclav Smil, Making the Modern World; Materials and dematerialization. Wiley, 2013. Born as a Czech, Mr Smil is Distinguished Professor Emeritus in the Faculty of Environment at the University of Manitoba.
(e) The subtitle says a "stirring." Evidence? The entire essay alludes it in the last paragraph, which is skimpy:
"But while everyone else scours the latest news over the GDP numbers and the Shanghai stock index, look closer: On Sunday came the announcement that China’s purchasing managers index had fallen for the sixth straight months -- but consumer retail sales were up 10.7% last year. The Chinese consumer is waking up. 作者: choi 时间: 2-4-2016 15:54
(2) Scott Cendrowski, Terrified by China? Blame Its Leaders. Most economists knew that China’s slowdown was inevitable, and so did China’s government. But it’s the ruling Communist Party’s reaction, as much as the slowdown itself, that’s making life miserable for investors. Fortune, Feb 1, 2016. http://fortune.com/2016/01/23/china-markets-government-investors/
Quote:
"Together, these actions have suggested to Western observers that Communist Party policymakers were not the great and powerful Oz they had imagined—they were more like the cowardly lion, lacking the courage to let rebalancing run its course.
"Experts have been predicting and welcoming China’s 'rebalancing' toward consumers for years. * * * Together, these actions [how China handles its economy and stock markets] have suggested to Western observers that Communist Party policymakers were not the great and powerful Oz they had imagined—they were more like the cowardly lion, lacking the courage to let rebalancing run its course.