"China’s Great Wall of Debt," by Dinny McMahon, Houghton Mifflin Harcourt, 256 pages, $28.
The zombies that appear in Chinese legends are not quite the same as their Western counterparts. They feast on blood, not brains. The differences extend to economics.
Chinese officials, like their Western peers, openly fret about zombie companies — insolvent firms kept alive by banks — but are far less willing to kill them off. This small excursion into the world of the undead is one of many gems in Dinny McMahon’s new book, a vivid account of China’s economic problems, from debt to falsified data.
McMahon, a veteran financial correspondent in China, most recently with the Wall Street Journal, wears his knowledge lightly, whether discussing ghost stories or balance sheets.
His book, “China’s Great Wall of Debt,” is notable for two reasons. It is one of the clearest and most thorough statements of an argument often made about the country: that its government has relied on constant stimulus to keep growth strong, an addiction that is bound to backfire. Second, he comes closer than any previous writer to covering the Chinese economy as Michael Lewis, the hugely popular author of “The Big Short,” might do.
His analysis is informed but accessible, animated by anecdotes and characters, some colorful, some verging on tragic. One criticism: In his introduction, McMahon explains that he will neither delve into the government’s efforts to clean up bad loans nor examine bright spots such as the tech sector. That makes sense as a way to keep the narrative sharp. Nevertheless, the cleanup and the bright spots matter.