Central government planners are worried. They want to steady the economy in the bellwether city at all costs — for fear of an impending crash. Such a meltdown could spark unforeseen consequences, and deal a crushing blow to state banks that have amassed billions in distressed debt.
To ward off the apocalypse, Beijing has been curbing loans for steel, cement and, of course, real estate during the past twelve months. According to Cao Yushu, a spokesperson for China’s National Development and Reform Commission (NDRC), the escalating investments are a “tumor in China’s economic body.” The economy has nonetheless continued at a rolling boil, growing by more than 9 percent. Provincial officials and managers customarily ignore edicts issued by the planners in Beijing.