Query by Kyoko: China (PRC)’s falling economy, what would come about next?
Studying the history of Chinese dynasties, according to an academian, there are always eight step transition as under.
1. Establish a new dynasty
two. Purge followers
3. Conduct wars of aggression
four. Modify Chinese characters and fabricate the history
5. Surroundings and bureaucrats become corrupt
six. Arise numerous secret societies and farmer riots
7. Military clique intrude to the capital
8. Return to 1
As they have constructed a huge number of ghost towns, regional governments and PLAs could not have earned money flow, however they have to make interest payments, they place varnish on the export quantity in order to get fake funds. This is the purpose why the export quantity to HK and Taiwan shows exponential increase even even though the import amount of HK and Taiwan from China are decreasing.
To make out with rollover, inter-bank’s brief-term interest rate –overnight rate— as soon as spiked up to 13.four% temporarily. It was really crazy.
Chinese nearby government and PLAs have to dress up their balance sheet, therefore they make high yield “wealth management product” via 融資平台( finance platform) equivalent term for shadow bank, that could modify the fake bond to true cash for them, even so the men and women who purchased those items would drop their cash. No 1 could forecast the total quantity of these uncollectible loans. But it is estimated 1.55 trillion US Dollar minimum to three.2 trillion US Dollar, these figure exceeds China’s foreign currency holdings. CCP, at final, decided to hide the financial figures such as amount of steel deals, electric consumption amount and so on…
CCP also forced Chinese medium not to report about the fund shortage which cause of increasing interest rates…
Paul Krugman described in a commentary report in the New York Instances, “China’s low-consumption, high-investment economy is a sort of Ponzi scheme. China’s economy as working like a bicycle, it falls over if it stops moving forward. Correct now, China’s Ponzi bicycle is operating into a brick wall”.
Because Chinese Yuan holds dollar peg technique, Quantitative Easing of FRB is a should for CCP, because they could print Yuan only keeping pace with FRB’s QE in order to improve income supply to the industry, that the explanation why CCP begged US like a dog not to quit their QE at Moscow G20 in July. But this may trigger a dramatic inflation, folks would suffer from it.
On the other hand, if CCP reduce cash provide to keep away from intensive inflation, a lot of massive businesses may possibly be bankrupted.
What do you feel?
@Mr. Liu — Thank you for your excellent answer, particularly in the dilemma of unemployment. Do you have any trusted figures of unemployment price? I hardly saw it in the news. The jobless is a really significant dilemma in every single nations, especially in the society with little freedom. I genuinely hate the entire system of PRC, and I hope excellent change might rise up in close to future.
@We left and returned! — sorry, I have no idea..
@Dog Lover — I have no interest about your post but feel uneasy if your “magic program” means a war. There are no magic wand in financial science.
@Mr. Liu — Thank you for your wonderful answer, particularly in the difficulty of unemployment. Do you have any trusted figures of unemployment price? I hardly saw it in the news. The jobless is a actually significant difficulty in every nations, specifically in the society with modest freedom. I truly hate the entire technique of PRC, and I hope good modify may rise up in close to future.
@We left and returned! — sorry, I have no idea..
@Dog Lover — I have no interest about your post but really feel uneasy if your “magic method” means a war. There are no magic wand in financial science.
@eiji — No, “what come about to china correct now” derive from China’s internal plobrems, not (or small) from “external aspect”.
You must reap what you have sown.
But I doubt you truly realize Chinese predicament nicely.
Very best answer:
Answer by Liu Maoxing
Yes you are proper, the inflation rate and the rampant corruption in China generating so a lot of difficulties in China right now. CCP has been so extended launching the unfair trading policy which tends to make China suffer its personal consequence. China has to suffer the consequence of its personal mistake for not playing fair trade like the rest of the globe does. Overproducing and dumping policy of China contributes to the trading deficit of China. As the result of trading deficit, China can not sustain its economy anymore and economy of China will be collapse.
You forgot to mention that the CCP keeps more than printing the Yuan which contributes to China’s financial down fall, here is the prove:
http://www.nytimes.com/2011/01/12/company/worldwide/12yuan.html?_r=
And not even to mention that China lost its jobs to the other nations like Vietnam, Bangladesh, Indonesia, Thailand, Malaysia, and so forth. due to the inflation and the labor wage increasement. As the outcome, the unemployment price in China is staggering and many Chinese lost their jobs. Far more and far more Chinese can not discover jobs since of the inflation price, specifically the poor migrant workers.
Property and housing bubble are also become difficulty due to the inflation, a lot more and a lot more Chinese cannot get house and acquire properties. As the result, a lot more and more Chinese are homeless simply because they never have sufficient income for buying property. More and far more Chinese are acquiring poorer simply because they do not have adequate money to acquire the house.
Then, the gap in between wealthy and poor in China is getting wider. Rich people acquiring richer, and the wealthy ones are going to the overseas to escape the madness in China. Although the poor ones are still quite poor, they endure also a lot although they never get any care from the CCP. The poor ones are the ones who impacted the most by the madness going own in China, poor individuals in China are treated unfairly by the CCP. The CCP only favor the wealthy ones even though ignore the poor ones, poor individuals are typically become the victim of CCP.
You can check the actual figure of China unemployment price here:
http://www.businessweek.com/articles/2013-07-26/divining-unemployment-in-china
Give your answer to this question beneath!