Resources

Economic Suicide In China

June 13, 2016

Summary

  • The optimists’ argument is that problems can be avoided in the short term. What about after that?
  • Laurence Scofield and Joel Litman provide a research perspective on China from both top-down and bottom-up fundamental perspectives.
  • China’s debt-to-GDP ratio today dwarfs that of Japan at the time it fell into crisis in 1989.

By Laurence Scofield and Joel Litman


On the tenth floor of one of the unfinished buildings strewn across a ghost town in southern China, a migrant worker calls the building contractor and tells him he’ll jump off if he isn’t paid his overdue wages.

Meanwhile, the contractor is also distressed. He climbs to the twentieth floor of the building and gets the developer on the phone. If he isn’t paid, he’ll jump off the building, too.

The developer, on the thirtieth floor of the building, calls the mayor and says if he isn’t paid he’ll join the other two in jumping off the building.


Click here to read the article in its entirety at Seeking Alpha.

 

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