China Wasted $6.8 Trillion On Poor Investments: Govt Researchers

By ValueWalk

China wasted approximately $6.8 trillion or 41.8 trillion yuan on “ineffective investment” over the past five years since 2009, according to an opinion piece published by two Chinese government researchers on Shanghai Securities Journal.

Xu Ce of the National Development Reform and Commission, the state planning agency and Wang Yuan from the Academy of Macroeconomic Research said China’s bad investments from 2009 to 2013 alone, account almost 50% of the total amount invested in the Chinese economy.

The researchers estimated that China’s poor investments in 2009 were 7.9 trillion yuan, 5.4 trillion yuan in 2010; 4.7 trillion yuan in 2011, 10.6 trillion yuan in 2012, and 13.2 trillion yuan last year.

Mr. Ce and Ms. Wang’s report indicated that majority of China’s wasteful investments were in industries including steel and vehicle production following the 2008 global financial crisis.

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