Re:China May Have $5.8T in Hidden Debt with ‘Titanic’ Risks
by panarky on Tuesday October 16, 2018 @05:17PM
(#18233353)
This is why I'd love to see a quantitative model, there are too many players and too many variables for good intuition.
What matters for each scenario is (a) how much it costs, (b) who bears the cost, and (c) how long it takes.
If Chinese creditors, investors and citizens bear 100% of the cost in scenarios 1 and 3, but they only bear 30% of the cost in scenario 2, then scenario 2 is preferable isn't it?
But what if Chinese citizens don't have a vote, and the damage to well connected elites is lower under scenario 1? Maybe that winds up the preferred course even if total cost is greater.
Who knows without the ability to even roughly quantify the primary, secondary and tertiary effects?
What matters for each scenario is (a) how much it costs, (b) who bears the cost, and (c) how long it takes.
If Chinese creditors, investors and citizens bear 100% of the cost in scenarios 1 and 3, but they only bear 30% of the cost in scenario 2, then scenario 2 is preferable isn't it?
But what if Chinese citizens don't have a vote, and the damage to well connected elites is lower under scenario 1? Maybe that winds up the preferred course even if total cost is greater.
Who knows without the ability to even roughly quantify the primary, secondary and tertiary effects?