Michael Pettis
Michael Pettis

@michaelxpettis

4 Tweets Jan 07, 2023
1/4
For the past two decades a disproportionately high share of infrastructure investment went into China’s less economically developed regions as a way of kickstarting growth and reducing regional income disparities within the country.
sc.mp via @scmpnews
2/4
This was always a questionable economic strategy if the reason for the relative poverty of these regions had to do with business, financial and political institutions that limited the productivity of local businesses and workers.
3/4
Now these same regions are facing net outflows of young, educated workers and of more dynamic businesses. This will only reduce further the economic value of the excessively costly infrastructure they had put into place.
4/4
As a result the gap will likely widen between economic objectives, by which infrastructure spending should flow disproportionately to more developed areas, and the political objective of reducing regional disparities.

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