Chan Kung: China's disastrous infrastructure investment
ANBOUND
The role of infrastructure investment in China's economic growth in the past decade has been well-noted and is seen as a key factor in the success of the "China model". However, these are most investments without maintenance and proper management, resulting in huge hidden government debt where large amount of capital is needed to repair, maintain, adjust, rebuild and reconstruct the infrastructures. Infrastructure investment, while becoming a stimulus for economic growth, is also a structured debt base and a dynamic factor that leads to a large accumulation of potential government debt. Unless the government largely abandons the original investment infrastructure, just like China now has abandoned a large number of water conservancy facilities, te actual over-spending investment in infrastructure is itself a disaster.