The Last Domino Falls in Beijing

That Chinese economic model which Pat Buchanan and the rest of the Ponderous Nationalism crowd envy so much? Well

It turns out that Beijing has managed to keep its economy growing during the global slump by resorting to massive bank lending to local governments, which then went on an infrastructure spending binge that’s certain to haunt the country for years to come. If we remember the causes of the economic crisis that has ravaged the United States and Western Europe, the most important one is something euphemistically termed ‘credit boom’ – excessive lending and borrowing that fuelled housing bubbles and unsustainable consumption. China seems to have been afflicted with the same disease, with only one major variation: much of the debt incurred in China has gone into the infrastructure sector, not consumption. So much for Chinese exceptionalism.

I guess “stimulus” doesn’t work any better over there than it does over here. But the real question is: If China stalls, who’s going to buy our debt?