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I believe I mentioned the absurd level debt being taken on in the PRC. Total US Federal Debt as a percentage of GDP is sitting at ~120%. While I would like this to be lower I don't think this is a particular problem. Most of us deal with far more debt in our personal lives. Total all your debt (house, car, whatever) and divide by your annual income. As an aside, total US debt (Federal, state, local, non-financial business and personal) is down from an all time high of 851% in Feb '21 to 761% in July '23. Again, this looks a lot worse than it is.
In 2008 the government debt (national, local, and state owned enterprises)/GDP ratio in the PRC was at 27%. By 2022 it increased to ~72%. The current debt is sitting at ~300%. The bulk of this debt is from local governments.
Local governments are borrowing to finance infrastructure projects to boost the local economy. The national government has restricted local government's ability to borrow so they are turning to off-balance sheet means.
For the past 40 years or so the PRC economy has been driven by national industrialization. The problem with basing a national economy is that you can only do this ONCE. The PRC is seeing a rapidly diminishing rate-of-return on infrastructure. Right now the CCP has to invest about $9.00 to get a $1.00 rise in GDP. In 2013 it was $5.00 and in the 1990s it was ~$3.00 investment to get $1.00 increase.
Cities of empty high-rise buildings with no one living in them are legendary in the PRC. Likewise with train stations with no trains or riders, airports with no planes, and bridges and Interstate highways with little or no traffic that goes nowhere.
What the PRC desperately needs is increased consumption. It is stuck at about 38% of GDP compared to 68% in the US. The problem there is that CCP officials worry, legitimately, that encouraging consumerism might not work (possible) and will lead to diminished control by the CCP (a dead certainty).
WWG1WGA
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)