Dinny McMahon – China’s Great Wall of Debt

A Book with Legs

Smead Capital Management

Investing, Business, Management

4.2 • 1.1K Ratings

🗓️ 15 February 2022

⏱️ 68 minutes

🔗️ Recording | iTunes | RSS

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Summary

For a long time, the world has considered China as an example of economic success, but those days may be over.

In this episode, Cole Smead is joined by Dinny McMahon, author of the book China’s Great Wall of Debt. Dinny takes a deep dive into China’s financial system and gives us a sense of how the country’s complex and “dysfunctional” economy works from the ground up. Dinny also explains why China’s economic growth has slowed down, how the accrual of debt has played a role, and why the “Chinese Miracle” has come to an end.

Transcript

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0:00.0	You're listening to A Book with Legs, a podcast presented by Smead Capital Management.
0:08.0	At Smead Capital Management, we advise investors who fear stock market failure.
0:12.9	You can learn more at Smeadcap.com or by calling your financial advisor.
0:26.8	Welcome to a book with legs podcast. I'm Cole Smead. I'm the president and a portfolio manager here at Smead Capital Management. At our firm, we are readers and book junkies. It can be
0:33.2	said that leaders are readers and we believe books provide us a great source of information
0:38.1	for filtering what is and isn't important for us as investors investing is the
0:44.1	last great liberal art and the best way to spend a lifetime of learning this
0:48.4	podcast is for readers thinkers business-minded people and investors who want to grow their knowledge from great authors
0:55.8	and their writing. Charlie Munger often talks about using multiple mental models and analysis.
1:01.6	Our aim is for this podcast to help listeners test Munger's theory in business, markets, and people.
1:08.5	I'm glad everyone has joined us for this episode. We are going to talk about some
1:12.4	economics that are strange, and our guest explains better than anyone. Dini McMahon is joining us
1:18.0	to talk about his book, China's Great Wall of Debt. Denny was a journalist covering the Chinese
1:22.9	economy and financial system at Dow Jones and the Wall Street Journal. Mr. McMahon was a fellow at the
1:28.4	Woodrow Wilson International Center for Scholars. He was formerly with Macropolo, the think tank arm
1:34.6	of the Paulson Institute. Before I welcome Denny, I just want to mention that Denny is the first
1:40.1	Aussie, and I feel honored to have him on the book with Legs podcast.
1:45.0	Dini, thank you for joining me today.
1:47.0	Good-day, Cole. Thank you very much for having me. I'm excited to be here.
1:50.0	Me as well. So I need to tell you first that your book did such a great job of describing how bizarre the economic system of China has become with great stories, really kind of getting into the people
2:02.5	on the ground, which I really enjoyed. I have to ask you, what inspired you to write the book?
2:08.5	Well, this came off the back of my reporting at the Wall Street Journal. So I started at the
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