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12-03-2013, 09:22 AM
Anyone getting onto S-chips (with links to Govt) - pls read the latest Edge Mag article on Page 6 - Interview with Andy Xie.
Xie had previously derided Spore as a money-laundering centre for Indonesian and ASEAN. He had never called something a bubble that turned out not to be a bubble...
In essence, China has been moving money into fixed asset investments with no returns, and Xie believed that the main motivation of moving the money to these fixed assets is corruption. Over the last 4 or 5 yrs in China, corruption has in fact skyrocketed. Fixed asset investments in the name of stimulus are actually driven by corruption opportunities.
Overcapacity is only a symptom of the mis-allocation of resources into projects with little or no returns.
Xie had previously derided Spore as a money-laundering centre for Indonesian and ASEAN. He had never called something a bubble that turned out not to be a bubble...
In essence, China has been moving money into fixed asset investments with no returns, and Xie believed that the main motivation of moving the money to these fixed assets is corruption. Over the last 4 or 5 yrs in China, corruption has in fact skyrocketed. Fixed asset investments in the name of stimulus are actually driven by corruption opportunities.
Overcapacity is only a symptom of the mis-allocation of resources into projects with little or no returns.