This home-made clip features Hugh Hendry, founder of Eclectica Asset Management, walking around the streets ofChina (presumably Beijing or Shanghai) and pointing out numerous empty buildings. Huge debt must have been incurred in erecting these buildings and without tenants there is no prospect of servicing the debt. What’s more, the workmanship also seems shoddy as a nearly-completed 13-story building in Shanghai collapsed last month.
Who will pick up the tab for creating all the overcapacity in the Chinese economy?
Hendry has perhaps looked at only a limited sample, but the video provides food for though in the greater economic scheme of things.
Source: YouTube, March 27, 2009 (hat tip: Edward Harrison, Credit Writedowns).
