The economy, explained, with stories and surprises. Imagine you could call up a friend and say, "Meet me at the bar and tell me what's going on with the economy." Now imagine that's actually a fun evening. That's what we're going for at <em>Planet Money</em>. People seem to like it.
February 17th, 2012
Episode 451 of 910 episodes
When you walk around a big city in China, it feels like an entrepreneurial free-for-all — guys selling stuff on street corners, lots of little shops, everybody hustling.But when you pull back the curtain on the country's economy, you find the government everywhere. The government owns, among other things, the country's biggest cell phone carrier, the three biggest airlines and the four biggest banks.Those state-owned banks in particular play a central role in the country's economy.Chinese people have one of the highest savings rates in the world, and they don't have many options for investing the money they save. So they put lots of their money in ordinary savings accounts at those state-owned banks.The banks, in turn, lend a lot of that money out to other government-owned companies, typically at very low interest rates. Those companies go out and build lots of new stuff. All that building contributes a huge chunk of China's growth.But the building can't go on forever. In fact, China may already have built too much stuff with borrowed money.