Get ready, World… the last time we have seen anything similar was in Dubai circa 2005 – 2007. Actually, nothing quite similar to this yet… even the Sheiks in Dubai did not seem to be as creative as the Chinese – just watch this video and you’ll see.
According to Bloomberg, a copy of Manhattan, complete with Rockefeller and Lincoln centers and what passes for the Hudson River, is under construction an hour’s train ride from Beijing (watch video). 

The question is: how many trillions did they spend for that? No one seems to know…

Yao Wei, an economist at Societe Generale SA in Hong Kong, says another 7 trillion yuan of debt will be needed to finish projects in the government’s five-year plan through 2015.

“It’s very likely that senior government leaders have no way of knowing which numbers provide the best picture of the evolving lending binge China’s banks seem to be on,” said Carl Walter . . .

First, let’s take a look at the “Chinese Manhattan” video and envy their construction miracles while the rest of the world falls apart:
“Bloomberg News tallied the debt disclosed by all 231 local government financing companies that sold bonds, notes or commercial paper through Dec. 10 this year. The total amounted to 3.96 trillion yuan ($622 billion), mostly in bank loans, more than the current size of the European bailout fund.

There are 6,576 of such entities across China, according to a June count by the National Audit Office, which put their total debt at 4.97 billion yuan. That means the 231 borrowers studied by Bloomberg have alone amassed more than three-quarters of the overall debt.

The financing companies accounted for almost half of the 10.7 trillion yuan in all local government debt tallied by the official audit.  

The number of loans going bad will rise because of the borrowers’ poor cash flow, according to a November report from London-based HSBC Plc. Around 68 percent of 184 local financing companies that have sold bonds analyzed by HSBC had a return on capital lower than 5 percent, the benchmark lending rate last year, compared with 37 percent for all 499 corporate issuers it studied, the report said.”
The point of this article in 3 different languages:
“The house of cards is about to fall” – English
“A casa vai cair” – Portuguese
La Maison tombe” – our “Portu-french” invention.
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