The world's tallest tower should have been built by
now. Officials said last year that the great edifice with 220 floors would be
erected in three months flat in China's inland city of Changsha by March,
snatching the crown from Dubai's Burj Khalifa.
The deadline has come and gone, yet the wasteland
sits untouched. It now looks as if the fin d'époque project – using prefab
blocs – may never be approved. Even China knows its limits.
Prime minister Li Keqiang has asked the State
Council to clamp down on the excesses of the regions. Not before time. A top
regulator says local government finances are "out of control".
Mr Li aims to cut China's economic growth to a safe speed
limit of 7pc next year and rein in rampant investment – still a world record
49pc of GDP – before it traps the country in a boom-bust dynamic of frightening
scale.
Vested interests are conspiring to stop him,
launching a counter-attack from their power-base in the $6 trillion state
industries. Even so, uber-growth is surely over.
China's catch-up spurt has a few more years to run
in the Western hinterlands perhaps, but when the full story comes out we may
find that nationwide growth has already fallen below 7pc.
Mr Li complained in a US diplomatic cable released
on WikiLeaks that Chinese GDP statistics are "man-made", confiding to
a US diplomat that he tracked electricity use, rail cargo, and bank loans to
gauge growth. For a while, analysts use electricity data as a proxy for GDP but
the commissars kept a step ahead by ordering power utilities to fiddle the
figures.
The National Bureau of Statistics has since revealed
that data collected by the regions overstates GDP by 10pc, though they have not
acted on the insight. It is well-known why this goes on. The reward system of
the Communist hierarchy has been geared to talking up growth, and officials
gain kudos by lowering the stated "energy intensity" of their zone.
China's Development Research Council (DRC) expects
growth to drop to 6pc by 2020. It could be much lower. The US Conference Board
says it will average 3.7pc from 2019-2025 as the aging crisis hits. Michael
Pettis from Beijing University thinks it is likely to slow to 3pc to 4pc over
the next decade, deeming this entirely desirable if it comes from taming the
runaway state enterprises.
If so, China's growth may not be much higher than
the new consensus estimate of 3pc for a reborn America, powered by its energy
boom and the revival of the chemical, steel, glass, and paper industries.
All those charts showing China's economy surging
past the US by 2030, or 2025, or even 2017, will look very credulous. China may
not surpass the US this century. Read more:
No comments:
Post a Comment