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R.I.P. Chinese Exceptionalism? (Project Syndicate)
September 6, 2018
By Arvind Subramanian, Josh Felman
From the article:
From Argentina to Turkey and from South Africa to Indonesia, emerging markets are once again being roiled by financial turbulence. But let us not lose sight of the biggest and potentially most problematic of them all: China.
Over the past few decades, China’s growth has appeared to violate certain fundamental laws of economics. For example, Stein’s Law holds that if something cannot go on forever, it will stop. Yet China’s debt keeps on rising.
The problem is that Mercantilism 2.0 is now under attack, both politically and economically. Politically, recipients of Chinese loans – from Sri Lanka to Malaysia to Myanmar – have been expressing objections to the BRI and its odor of neo-imperialism. Economically, the onerous terms of BRI financing have resulted in alarming debt build-ups in at least eight countries, according to the Center for Global Development.