Part 4/9:
The incentives to generate GDP often lead to more construction rather than genuine economic growth. As Leland Miller of China Beige Book points out, the mere act of building can inflate GDP figures, regardless of the utility of these constructions. This creates a façade of growth that may not reflect a sustainable or productive economic model.
The core issue arises from the understanding of economic activities in China, where the government controls and owns significant portions of the economy through state-owned enterprises (SOEs). This system hinders private investment and, consequently, individual wealth growth, which is paramount for increasing consumer spending.