How China Pays off Debt – In Praise of China

How China Pays off Debt

Ever Wonder How China Pays off Debt?
Here’s an example: Several years ago the  Chinese Government identified broadband as a major asset and announced on.
China Says Broadband Speeds Of 20 Mbps By 2015 Forbes: 
Then, last year, the Government announced that online micro-businesses would be a national priority.
Now its media are starting to run positive stories like these:

Creative services provide new career options on China’s internet

People offering their time and skills on the internet for a fee is becoming a new way to embark on a new career in China. Whether you need a morning wake-up call, someone to accompany you to a plastic surgery procedure or driving practice, or if you have a stack of garlic that needs peeling, you can find someone on the internet offering their skills or at the very least their time, reports our Chinese-language sister paper Want Daily. An internet user with the handle Zhangxiaohua claims to be able to peel garlic skin very quickly and offers the service at 100 yuan (15.70) a time. One of the most popular services available on Taobao is provided by a model called Chen Xiao, who is available on a per-hour basis to perform tasks like picking up a friend, delivering coffee or buying a train ticket on the customer’s behalf. Obscene requests are rejected.An internet user going by the name Nini offers a morning wake-up call and to accompany people going through a heartbreak. More

It coincides with the Government reaching the goal they announced 3 years ago: to have every city with 20Mbps broadband by 2015 – which they have just done.
Watch this tsunami of internet nano-businesses ripple across 1.3 billion inventive people. A nice jolt to the economy and the Gov’t captures some of the increased  income generated by those online businesses by a higher volume of online taxes. That tax revenue pays off the entire national broadband installation cost in 5 years.

That’s why the Chinese Government can issue as much debt as it does: before it issues the bond it always creates an offsetting revenue stream that will service that bond. Here’s a snapshot of China’s debt compared to the rest of the world:

China How China Pays off Debt the old-fashioned way: it doesn’t borrow until it can structure the deal as a win-win. These are non-predatory deals. There are no victims, no losers in deals like this.

CHINA DEBT GDP CHART

CHINA DEBT GDP CHART

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