In 1994, Bill Drummond and Jimmy Cauty, the former members of best-selling pop duo KLF and inveterate pranksters, set fire to GBP1 million in cash - today worth more than HK$15 million - on a remote Scottish island. For more than an hour, according to reports, they fed the flames with 20,000 GBP50 notes, until the entire fortune was reduced to ashes.
Judging by the official figures, something similar is going on today in China, only on a vastly greater scale.
Yesterday, the National Bureau of Statistics announced that between them, the government and businesses had invested 2.26 trillion yuan in property, plants and equipment in urban China over the first four months of this year.
To put that amount into perspective, it is 50 per cent greater than Hong Kong's entire expected economic output for the whole of this year.
More to the point, the amount China invested in such urban fixed assets between January and April is up more than 25 per cent over the same four months last year. Considering that fixed asset investment made up half of China's gross domestic product last year, according to official figures, and that investment appears to be growing considerably faster than the overall economy, yesterday's figures should be setting off the alarm bells.
Many analysts believe this scorching pace of investment is unsustainable. They point out that when the investment to GDP ratio has exceeded 40 per cent in other countries, the runaway boom has tended to end in a horrible crash. Thailand, whose investment level topped 40 per cent immediately ahead of the 1997 Asian economic crisis, is frequently cited as a cautionary example.
