Reply #18: Well, without the $900 billion stimulus in the $4,300 billion economy [View All]

[amandabeech]

there may very well have been a collapse.

Free market types claim that command economies, which China's is in part, will allocate resources inefficiently. China's building of considerable excess capacity in concrete production may be a symptom. Unless China rebounds to the extent that it needs that capacity in the 5-10 year time horizon (or less), those cement plants may turn out to be white elephants.

You probably are familiar with Japan's effort to get itself out of the economic doldrums in the '90s by infrastructure spending. The spending did more than bring things up to a point where they filled the current needs and those going into the medium-ish future according to some commentators. Japan may have built far too many equivalents of bridges to nowhere, which to a certain extent is a waste of capital. Japan, of course, is still rather moribund economically.

Perhaps China will end up with a slight case of the Japanese economic disease.