The Chinese Economy Is Facing A $6.8 Trillion Nightmare That Could Get Worse

Friday, November 28, 2014
By Paul Martin

Mike Bird
BusinessInsider.com
Nov. 28, 2014

The Chinese economy has wasted $6.8 trillion (£4.3 trillion) in investment during the last four years.

Six-point-eight trillion dollars.

That’s according to a report from China’s National Development and Reform Commission and the Academy of Macroeconomic Research, written up here in the Financial Times. The report says that amount has been “ineffective investment.”

For sure, $6.8 trillion is a difficult figure to imagine. That’s two years of output for the entire German economy. It’s more than four times as much as is invested in S&P 500 index funds.

Even in the enormous Chinese economy, that’s practically half of the investment between 2009 and 2013, the period covered by the investigation. This is likely to have pretty grim effects on Chinese economic growth in the years ahead.

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