At the same time, there was considerable evidence that the willingness of the banks to lend to enterprises at low rates of interest compensated for the low profit rates of many enterprises-and that parallel with this went a willingness not to push loss-making enterprises into bankruptcy, so loading the banking system with vast, probably unrepayable debts.57
As with any capitalist boom, there was a burgeoning of all sorts of speculation as enterprises and rich individuals sought to find quick and apparently effortless sources of profitability: "Investment in real estate grew by almost 20 percent a year over the past four years [to 2005] and reached 1 1 percent of GDP in 2005" .58 Everywhere in China's major cities there was apparently endless building and rebuilding of luxury apartment blocks, relatively expensive (by Chinese standards) fast food outlets, high class hotels, and shopping malls dedicated to selling designer products (even though such stores often seemed virtually empty of shoppers). And there was the lure of international speculation to add to the lure of local profiteering. In March 2008 executives of the CITIC Group in Beijing were on the verge of signing a deal to buy a one billion dollar stake in the US bank Bear Stearns when news came through that it had gone bust.59
This combination of contradictions meant that a smooth upward path of growth was a most unlikely scenario for Chinese capitalism. Certainly those charged with managing its economy were by no means confident that they could control the tempo of competitive accumulation in a way that could avoid unexpected catastrophes as managers of enterprises, both private and state owned, sought to outdo each other. Or, as Premier Wen Jiabao told the National People's Congress in March 2007, "the biggest problem with China's economy is that the growth is unstable, unbalanced, uncoordinated, and unsustainable". 60
The unpredictability of the Chinese economy had important implications for the rest of the world. It had replaced the US as
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