Over-capacity and wasted resources are a hallmark of the Chinese government's insistence on growth at all costs. Just one example is that the country is currently building a number of high-speed railway networks as a kind of economic stimulus to create jobs. The trouble is the ticket prices are higher than most people there can afford and are more expensive than some of the faster air travel options available. The natural result is that citizens are not using the existing lines enough to make them economically viable. Yesterday a major rail line was shut down after only two months of operation because so few people were using it:
“Some people wondered why the train was shut down permanently and didn't try to compete more effectively with airline tickets in terms of prices. Others felt closing the newly-built rail line was a complete waste of resources.
What is outrageous is that there doesn't seem to have been any feasibility study conducted to see if such a line was needed, and instead the government, probably provincial, went ahead and built it just to boost GDP growth.
Imagine all that steel, technology, and not to mention migrant workers' physical labour to build the rail line, only to have it shut down in two months?”
See: High Speed Overload Hat tip Ray T.
This reality behind the “China story” are details that perma-bulls recklessly gloss over.
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