As we look at the biggest stories of 2013, what stands out to Marketplace China Correspondent Rob Schmitz is the idea of “forced transparency” in two specific areas of China: bad air quality and bad debt.
AIR QUALITY. Some people may have first started paying attention to the air pollution in China during the ‘airpocalypse’ in Beijing earlier this year, along with this month’s bad Shanghai smog. And that has shifted focus to the hard truths of China’s economic growth. Lung cancer deaths are up, and so is frustration from everyday Chinese who must live with the heavy pollution.
BAD DEBT. Then, there was an interbank lending crisis in China in June. China’s credit bubble got too big, and the “shadow banking” industry posed a huge threat to the world’s second-largest economy. Schmitz says there is “tons of bad debt” in China’s economic growth model, which is built on the premise of, “borrow, borrow, borrow; and build, build, build.” For years, China could hide it. But like air pollution, it’s now out there for all to see.
“We’ll see more events like this in 2014, where the government can no longer hide from its own people,” Schmitz says, “because the fallout from 30 years of economic growth at all costs is becoming more and more obvious to everyone here.”
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