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The Phony Success of China's Stimulus

Easy money has delayed Beijing's day of reckoning. Expect to see a lot of bank loans go bad.


Among the many myths surrounding China's economy, the biggest relates to how Beijing averted a recession after the global financial crisis. The government was quick out of the gate with a stimulus program running to the trillions of dollars, and growth in gross domestic product (GDP) didn't dip as deeply in China as it did elsewhere. China bulls say this shows the government is smart and worth emulating.