After a tough first quarter, China’s economy grew 7.5 percent this Spring – faster than most economists expected. The reason? Stimulus funding.
China’s government has injected significantly more money into the Chinese economy in the last few months, spending money on railway infrastructure, social housing projects, and public works projects; activity much of the country hasn’t seen since the big stimulus package of 2008 that was launched to cope with the global financial crisis. That stimulus package has lead to economic waste and bad debt.
As a result, many economists are waiting for more meaningful structural reforms to China’s economy. But others don’t see it that way.
"They want to walk this sort of very delicate balance between stimulating to ensure a basic seven, eight, nine percent nominal rate of GDP growth, and then on the other side, pushing through some reforms," says Standard Chartered’s Head of China research Stephen Green.
Those reforms have yet to take shape. So far, Xi Jinping’s government has been too busy expelling corrupt government officials as part of a wide-ranging anti-corruption campaign, which has also had a negative impact on China’s economy. But Green thinks we’ll soon see China’s government allowing private companies to open banks and begin lending, which he says would be a sign that bigger economic reforms are on their way.
Urban bike-sharing programs have exploded— there are now more than 30 in the U.S., with plans for many more. But there are growing pains, and users can't see the biggest one: the bikes they’re not riding, because the biggest supplier went bankrupt six months ago. The biggest, most-popular programs won't expand this year, and planned programs in other cities have gotten stalled in the pipeline.
For example, a few days before Chicago’s Divvy Bikes celebrated its first birthday in June, general manager Elliot Greenberger noted how much the program’s subscriber base had grown in 2014.
"We’ve doubled, and it’s only June right now," he said. "We continue to see people signing up at about a hundred a day, sometimes more."
Here's what the growth curve looks like since Divvy started:
Here's another, perhaps even more impressive way of looking at Divvy's growth curve:
However, Divvy was supposed to expand this spring — adding about 60 percent more bikes and docking stations. That’s on hold. The company that supplies Divvy’s equipment— Public Bike System Co.* — went bankrupt in January. That company also supplies New York, Washington, Boston, Toronto, San Francisco, and other cities.
Those programs are managed by Divvy’s parent company, Alta Bicycle Share. When asked how long it has been since the supplier shipped new bikes, Alta Vice President Mia Birk pauses for a moment.
"Ooh," she says, "It must have been pre-bankruptcy."
That means no new bikes for any of Alta's cities. Meanwhile, programs in cities like Baltimore, Vancouver and Portland — also slated to be managed by Alta and supplied by Public Bike Share — have delayed their launch dates. The equipment includes proprietary designs, so going with another supplier isn’t an easy option.
"It’s been a disruption!" says Birk. "I mean, I’m not going to lie to you. It’s been really challenging." Birk says Alta has been working hard to get a new supply of bikes, but new bikes probably won’t arrive until 2015.
"Seems like there were some major promises made, and nobody looked closely at the financials or the supply chain," says Jeremiah Owyang of Crowd Companies. "That’s what you’re seeing here. Everybody went with the one provider, and overwhelmed them."
Colin Hughes studies bike-share worldwide at the Institute for Transportation and Development Policy. He says Public Bike System Co.’s bankruptcy doesn’t worry him.
"There’s plenty of other companies out there making bike-share bikes," says Hughes. "You may see the types of bikes used in some cities thrown out. But I don’t think you’re going to see bike-sharing as a whole thrown out."
Bike-sharing continues to grow worldwide. More than one city in China has more shared bikes than all of the United States.
*CORRECTION: The original version of this article misstated the name of a company that provides equipment for municipal bicycle-sharing programs. It is the Public Bike System Co. The text has been corrected.
Remember when Jon Stewart went on Crossfire – the old Crossfire, with Paul Begala and Tucker Carlson, not the new one with Newt Gingrich and whatstheirnames – and begged them to "Stop, stop hurting America"?
Not to put myself on the same level as Stewart, but here's my paraphrase: Washington is hurting America.
Yes, I know Washington has been dysfunctional for years now. And that we've all somehow become accustomed to politicians kicking the proverbial can down the road (gee, love that phrase) on serious and substantive issues of economic policy.
Maybe I'm being naïve here. But, the news this week that the White House has signed on to the Congressional quick fix to shore up the Highway Trust Fund for the short term was especially disspiriting. Why?
You know, I'm not sure. I guess because...in the not too distant past, we had a budget deal. We had responsible politicians acting the way they ought to, planning for the long term and not doing the nation's business in six-month chunks. I guess I thought maybe things had changed.
And then I remembered.
Naïve is probably right.
CORRECTION: The original version of this story incorrectly spelled Jon Stewart's name. The text has been corrected.
A craft brewer in Maine is partnering with a most unusual item — seaweed. If the beer takes off, the state's emerging seaweed aquaculture industry may benefit.