Oh, great. The one economy that kept chugging along during the recession only did so because it was stealing from its own future. Remember how Obama and Tom Friedman and all those nutty liberals kept gushing over the wonderfulness of China and its amazing infrastructure machine?
Economists estimate that out of the 4 trillion yuan (about $586 billion) stimulus package, the central government spent just over a quarter of the money, with the rest coming as bank loans to local governments. Also, many local governments took out additional loans on their own to finance public works projects. As a result, economists said, local governments are now sitting on a total potential debt bomb of 7 trillion to 11 trillion yuan.
“There’s tens, or hundreds, of Dubais waiting in the pipeline,” said Xu, referring to the debt-laden Persian Gulf emirate. “It was a panicked reaction to the global crisis. So they rushed out to spend money wherever they could. They borrowed from me — and from every Chinese.” He added another ancient proverb: “You eat your dinner at noon, you have to starve at night.”