Counterparties: Should we envy China?
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If youâ€™ve been paying attention to the US spending cuts which are scheduled to take place automatically on January 1, the Chinese Ministry of Railways has a glimpse of a utopian parallel universe: $32 billion in spending in November and December alone. Even for an organization with an annual budget of approximately $100 billion, thatâ€™s a huge spike. As Quartzâ€™s Naomi Rovnick puts it, it’s the latest example of the â€śmoney-go-round that is Chinaâ€™s state-owned economyâ€ť.
The spending isnâ€™t limited to trains: Thereâ€™s also the $157 billion in broad infrastructure investment that was approved last month. From the perspective of a deadlocked DC, itâ€™s easy to envy Chinaâ€™s vast infrastructure budget. But while Chinese policymakers are good at building trains that run between cities, in urban areas they are repeating many of ourÂ car-centric mistakes and all the construction is arguably making its cities even less livable.
As Michael Schuman argues in Time, the myth of an efficient, far-sighted China is believed largely by those inside its business-class cocoon. â€śLive here for a whileâ€ť, he says, and economics, politics, and daily life look much more messy and complex.
The perception that China is ruled by wise leaders adhering to neo-Confucian ideals has been contradicted by revelations of the massive wealth accumulated by its elite: an estimated $2.7 billion by the family of Prime Minister Wen Jiabao; $376 million by the family of incoming president Xi Jinping; $89 billion by just the 70 wealthiest members of the National Peopleâ€™s Congress; $136 million by the family of the now ostracized Bo Xilai.
FT Alphavilleâ€™s Kate Mackenzie smartly identified the reality of much of Chinaâ€™s infrastructure projects — large-scale fixed assets are gleaming yet uneconomic and corruptly constructed, while local-level projects like sewer systems and other basic safety needs are ignored. When those two problems converge, the results can be deadly and socially destabilizing, as Evan Osnosâ€™ excellent piece on Chinaâ€™s high-speed rail disaster illuminates. — Ben Walsh
And on to todayâ€™s links: