The following is the continuation of the previous chapter.
What is important for growing the economy is to increase demand.
There are two ways to increase demand.
It is better to increase "consumption" and "investment".
Regular nations strive to increase "consumption", but China has grown with investing more than half of the economy as "investment".
In China, "Consumption" accounts for only 39% of GDP.
It is a country that has grown overwhelmingly by "investment".
For investment, accounting, we will post the expended money as an asset and postpone the expenses.
On the other hand, if you spend one hundred of money, you will incur a charge of one hundred.
Even if investment creates demand using one hundred money, if it is actually under construction etc., amortization is zero.
In other words, investment can be said to be a pattern of growth that postpones bills.
China has continued this overinvestment for nearly two decades.
One is to make a tremendous scale of capital investment, become a factory in the world, and acquire over supply capability.
Secondly, China has created luxury houses around large cities.
It is making a ghost town already.
Lastly, it is an infrastructure investment.
Cheng Yonghua, who has served as the ambassador to Japan in 2009, said, "China creates three Shinkansen lines north and south east, west, the total extension of Japan's Shinkansen is 2,300 kilos, while China exceeds 10,000 kilos in no time right", he was talking big.
When I heard that, in truth, I thought "It would be a lie," but China did.
It does not know that explosive infrastructure thing will stay.
Not only the Shinkansen but also the expressway, the subway, the dam are maintained.
China's cement consumption is said to exceed the consumption of 100 years of America in two years.
The point here is can China can properly collect the cost of these construction investments.
If it cannot be collected, everything will become bad debts.
This draft continues.