Chinese miracle or mirage?

I recently added Marginal Revolution to my "blogs I follow" list and read a post on "Totally false and ridiculous claims about Chinese bubbles".

It refers to an article on China's Bubble. A few quotes -

Finally, China can force government-owned corporate entities to borrow and spend, and spend quickly itself. This isn't some slow-moving, touchy-feely democracy. If the Chinese government decides to build a highway, it simply draws a straight line on the map...

...But don't confuse fast growth with sustainable growth. Much of China's growth over the past decade has come from lending to the United States. The country suffers from real overcapacity. And now growth comes from borrowing -- and hundreds of billion-dollar decisions made on the fly don't inspire a lot of confidence. For example, a nearly completed, 13-story building in Shanghai collapsed in June due to the poor quality of its construction.

This growth will result in a huge pile of bad debt -- as forced lending is bad lending. The list of negative consequences is very long, but the bottom line is simple: There is no miracle in the Chinese miracle growth, and China will pay a price. The only question is when and how much.

What do you guys think? I really like the Lucent illustration in the article.

Something else that this article sparked. There is this consistent "price of democracy" that India pays and the reason we lag our bigger neighbor. Is that really accurate? Why is democracy treated as a governor on the Indian engine? How did Western Europe flourish under democracy leaving Eastern Europe behind in the dust?

Last hurrah

The official end of my sabbatical was a road trip back home. Delhi to Bombay, through the Rajasthan desert, the salt plains of Dandi and finally wending my way over the Sahyadri's finally to make it to the traffic snarls of Bombay. All of this in my mother's trusy Wagon R and no A/C (crazy but true).

I've done my fair share of road trips in the U.S, and never associated road trips with India. The romantic Indian railways has always superseded other modes of transport. But the dhaba's and chaiwallah's along NH-8 have changed my mind. Although at the first dhaba I think Andy, Mrig and Nathan can attest to how road food phobic I was. Changed by the end of the trip though.



Most people do the trip in 2 days (1500 km), but we decided on a pace of 3 days. First day we traveled half the distance to spend the night in Udaipur since we preferred spending our time on the beaches on the western coast. We stopped at Chittorgarh on the way - fantastic Rajasthan fort that most tourists skip cause it's a bit out of the way.



We left Udaipur early morning (5 or 6 am) to beat the Indian summer and made it to Gujarat fairly quickly. The landscape changes from barren to green without realizing as you get nearer to the coasts. But as we approached Dandi, where we intended to sell our English travelers for their weight in salt, things started getting dry and barren again. Once you hit the marshes, salt pelts you in the face. Kind of expected some kind of Gandhi memorial but it was just open brackish land. It's just clay mud once you reach the sea. I thought I could walk through it, but I sank up to my knees on stepping in. Nathan thought I was going to sink. Pulling my leg out my flip flops got lost in the mud and soon I was upto my elbows and knees in clay trying to retrieve them. Not a pretty sight - and unfortunately no pics either.



That night we ended up in Umbharat (pronounced ubharat), a small beach outisde Surat, at the Modi resort. With no other hotels in the area, except the "Dolphin water park" that rented out rooms by the hour and had a caretaker who walked with a cane and looked like he would kill us and sell our meat to the local McDonalds, we opted for staying at Modi over Andy's objections of not wanting to support a "Modi" establishment. Getting to the point though - don't go to Umbharat, not worth it.

We had hoped to spend some time on the beach the next morning, but since it was fairly shitty we left early and continued along the Gujarat coast till we reached Daman. Now all beaches north of Bombay are fairly rocky and not the quality beaches you will come across in Goa. But Daman has it's own charm. Jampore beach has quality shacks on the beach that will bring you coconut water & cheap Kingfisher right there on the beach. No hassles over liquor permits or drinking in public. A sliver of paradise squeezed between Gujarat and Maharashtra. I hear it's counterpart Diu is much more charming with it's Portuguese flair and beautiful, but Daman with it's hotel Chinatown was great.



Next day we reached Bombay by 4 or 5. The car stank by the time we reached home. Amazing ability of the human body to adapt to anything.

Credits -
Mrig - This trip was your brainchild. And regardless of all the sniping - you didn't kill us while driving on the highway.
Andy - I think secretly Mrig and I enjoyed the drama of convincing you to come along with us on this trip. And if it wasn't for you, I would have insisted on spending 2 grand a night on hotels and missed out on some of the best parts of the journey.
Nathan - You lived up to your word of drinking non stop on this trip. Well done.