Arthur Kroeber

than it was before.

The problem is how do you essentially retire this enormous stock of very low productivity infrastructure investments, debt financed, and how do you sort of move on and have a more productive return on capital in future?

And there are ways from solving that problem.

To me, the fundamental issue is

They have too much of a supply-side strategy, not enough of a demand-side strategy.

It's really a macroeconomic issue that if they had stronger domestic demand, that would generate more profits for companies.

They would be able to – more pricing power for companies.

You would get a little bit of inflation.

So you would have more cash flows within the economies that would enable people to – and local governments to pay down debt.

you know, a little bit of inflation would erode the real value of the debt.

And that's essentially how they got out of their last debt problem in the late 1990s.

They had gigantic bad debts in the banking system, essentially representing legacy loans to state-owned enterprises.

They had no way of paying them back.

And they had a very growth-friendly program that generated a lot of growth, a lot of inflation, and that basically strengthened the debt problem.

And what they need now is a kind of a revamped, updated version of that strategy where they do a lot more to promote domestic demand to get more profits, more cash flows, and a little bit more inflation into the system.

And that would probably solve the debt problem over a decade or two.

They're not successful enough.

I thought one of the problems in the world that we're facing today is that they're too successful at too many things and that this is creating difficulties for other people.

So, yeah, that has come up, you know, from time to time.

And during the period in the 90s and 2000s where they're growing at 10% a year, which is the fastest growth rate recorded by any economy in the history of mankind –