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China Spends $600 Billion To Trump America’s Economy
Posted on 5/2/20 at 10:00 am
Posted on 5/2/20 at 10:00 am
LINK
quote:
China Spends $600 Billion To Trump America’s Economy
Ten years from now, when economists mull the exact moment the U.S. ceded the future to China this week’s events are sure to top the list of time-stamp candidates.
This was the week, after all, when Chinese President Xi Jinping tossed another 4 trillion yuan, or $565 billion, at an economy taking devastating coronavirus blows. The 4 trillion-yuan figure will sound familiar to students of 2008 and 2009, back when Beijing threw exactly that amount at plunging demand amid the “Lehman stock.”
It worked back then. China recovered rapidly from Wall Street’s crash thanks to aggressive infrastructure spending. By 2009, China was growing 8.7% again thanks to giant public works projects—six-lane highways, bridges, ports, new skyscraper-strewn commercial centers.
Now, as Xi’s Communist Party pulls a similar play, it’s hard not to lament this week’s missteps in Mitch McConnell’s Washington.
Within the same 24 hours during which Xi’s announced a nearly $600 billion plan to build even more airports, railways and power grids, Senate Majority Leader McConnell gave the thumbs down to comparable upgrades to America’s economic hardware. “Infrastructure is unrelated to the coronavirus pandemic that we’re all experiencing and trying to figure out how to go forward,” McConnell said.
Music to Xi’s ears. The trillions of dollars his government lavished on the “Made in China 2025” extravaganza is already positioning China to lead the future of artificial intelligence, automation, micro-processing, renewable energy, robotics, self-driving vehicles, you name it. And Trump made it easy for Xi. As China prepares for the global economy it will confront in 2025, Trump is making coal great again.
Granted, Xi has been slow to get the state’s tentacles out of the economy. His pledges to let market forces play a “decisive” role in decision making have gotten only modest traction in seven years. China’s hulking $10 trillion shadow-banking system, meantime, continues to allocate capital recklessly.
Look no further than the recent jump in the number of bank bailouts, including Hong Kong-listed Bank of Gansu. Beijing’s rescue efforts highlight the deterioration of balance sheets and the extreme opacity that plagues China Inc. The accounting fraud at Luckin Coffee, China’s supposed Starbucks killer, is a reminder Asia’s biggest economy isn’t ready for global prime time.
But Trump’s three-and-half years in office have been a lost period for building the kind of economic muscle needed to stay ahead of China. Trump is doing zero to get under the economy’s hood. His trade-war and protectionist policies might’ve worked in, say, 1985. In 2020, though, his tariffs are merely added headwinds as the global economy fends off COVID-19 fallout.
Trump isn’t increasing competitiveness and productivity or catalyzing innovation. He’s cutting investments in education, training and health. Trump’s Republican Party is avoiding the infrastructure “big bang” needed to raise America’s economic game. Instead, it cut taxes in ways that reward billionaires without incentivizing companies to fatten paychecks or hone competitiveness.
Over the last few years, Trump widened the gulf between rich and poor by putting monetary easing ahead of structural reform. It’s the same mistake Japan has been making since the 1980s. Stimulus alone does nothing to reduce corruption, increase efficiency or level playing fields.
America’s crumbling infrastructure could use its own nearly $600 million—or even $2 trillion—facelift. Not only would it create jobs, and fast, but also better prepare the U.S. for a 2025 when China’s dominance passes the point of no return.
??
Chinese President Xi Jinping learns about the[+]
XINHUA/JU PENG VIA GETTY IMAGES
There’s an alternate reality in which China’s coronavirus debacle plays into Trump’s hands. China absolutely needs to account for its handling of a COVID-19 pandemic believed to have started in Wuhan. There should indeed be investigations and punishment doled by the global community. But Trump’s antics, lies and over-the-top bombast are helping China deflect blame.
Each bizarre Trump Twitter rant makes Xi’s China look serious and sober by comparison. Each Trumpian threat to impose new tariffs here, demand higher military payments there or manufacture some controversy over there plays into Beijing’s hands.
So does McConnell’s refusal to rise to the occasion. At 78, it’s reasonable to think the Kentucky Republican might not have many more years left in top Senate leadership. Yet the lost period of reform that McConnell represents will be with U.S.-China dynamics for decades to come.
Come 2025, U.S. investors may wish they could engineer their own alternative reality—one where McConnell and Trump favored a Marshal Plan of sorts to halt America’s slide toward developing-nation status in terms of infrastructure. When economic historians of the future mull when this risk morphed into fact, the last few days may haunt Washington.
Posted on 5/2/20 at 10:09 am to LSUDVM1999
Who wrote that crap? IB CNN?
Posted on 5/2/20 at 10:11 am to Jjdoc
what's so funny? seems pretty serious to me.
Posted on 5/2/20 at 10:20 am to LSUDVM1999
What a lame write up. Hell, a LARGE portion of infrastructure is China's "ghost cities." They were bought and paid for by the wealth that was "funneled" down to the latest generation that survived the "one child policy." In short, a husband and wife have not only their earnings, but the earnings of their parents, and grandparents. Where were they allowed to invest by the CCP? Real estate...hence the ghost cities. The construction of those cities was estimated to provide between 25% and 50% of their GDP. Basically, their economy was propped ip by the construction of those cities and is not nearly as healthy as they claim. This latest "600 billion dollar injection into infrastructure" had to occur imho to stave off potential civil unrest. This article reads like a fear mongering hit piece aided in its info by CCP propoganda.
Posted on 5/2/20 at 10:21 am to LSUDVM1999
So Forbes admits China’s numbers are complete bs but then says we should take them completely serious?
Posted on 5/2/20 at 10:22 am to LSUDVM1999
I don’t think a society that isn’t free can lead in anything.
Posted on 5/2/20 at 10:23 am to LSUDVM1999
In 4 short years the US media went from being useful idiots spreading Russian disinformation to useful idiots spreading Communist China propaganda.
Posted on 5/2/20 at 11:06 am to LSUDVM1999
We've got enough debt already.
Posted on 5/2/20 at 11:25 am to LSUDVM1999
But Magnum P.I. likes Trump so that's good enough for this board
Posted on 5/2/20 at 11:44 am to TailbackU
quote:
But Magnum P.I. likes Trump so that's good enough for this board
Obsess much?
This post was edited on 5/2/20 at 11:45 am
Posted on 5/2/20 at 11:48 am to LSUDVM1999
quote:
Within the same 24 hours during which Xi’s announced a nearly $600 billion plan to build even more airports, railways and power grids
How much of that is useful spending? Will those airports and railways be used?
Posted on 5/2/20 at 11:56 am to TailbackU
quote:
TailbackU
Do you have sufficient self awareness to be capable of embarrassment?
I picture you as a young fool, prematurely embittered libtard old before your years, or with some psychological pathology.
Posted on 5/2/20 at 12:11 pm to IslandBuckeye
Yes because using words like "libtard" is very mature
Posted on 5/2/20 at 1:07 pm to LSUDVM1999
Go listen to the "we study billionaires podcast" with Leland Miller, the ceo of china's beige book, from a week or so ago. You'll learn how fake china's numbers and economy is. They are in a world of pain from years of dumb spending to get fake gdp growth, global demand dropping added to that is killer.
This is an ignorant hit piece. Educate yourself.
This is an ignorant hit piece. Educate yourself.
Posted on 5/2/20 at 1:49 pm to LSUDVM1999
Prominent segments of the fabric of the US nation are all ready to SURRENDER to Red China!
WITHOUT ONE SHOT IN ANGER BEING FIRED!
At least France fought back a bit in 1940. That's all I have to say about that.
WITHOUT ONE SHOT IN ANGER BEING FIRED!
At least France fought back a bit in 1940. That's all I have to say about that.
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