Earlier this month I highlighted the continued deceleration in Chinese lending growth from it's peak in late 2009. Just how massive their credit growth was unknown to me until this recent post and chart by Global Macro MonitorThe growth in lending right after the 2008/09 credit crisis is truly spectacular, even compared to other high growth Asian economies. I'll snicker even more when I hear talking heads gush about how the Chinese mandarins were able to 'navigate' their way through the economic crisis and their ability to manage such a large economy.
Bunk.
They just called up the bankers and said LEND.
The bankers asked, "How much?"
It was not some Chinese mastery of the economic cycle or superior technocratic skill; it was simply an ability to throw lots of money at the problem. Unfortunately for China the bill is now coming due.
