China’s economic growth is fake. The economy is not growing at 9% per year. It is contracting by 10%. So said a prominent Hong Kong economist in a lecture he did not know was being recorded. (Guys, it’s a cell phone world!)
The growth figures are fake. They are being pumped up by government spending on infrastructure projects that are the equivalent of bridges to nowhere.
Professor Larry Lang said that every province is Greece.
He warned that Chinese government censorship of the media is concealing reality. This censorship is comprehensive.
In other words, Communist bureaucrats are acting just like Communist bureaucrats.
The real rate of price inflation is not 65%. It is 16%. (But how can he be so precise?)
The total debt of all levels of government is worth about $7 trillion. But the government is paying $2 trillion in interest a year. (This seems way too high.)
There is too much excess capacity. Private consumption is only 30% of total economic activity. The PMI (purchasing manager’s index fell to under 51 in July. 50 means neutral. Anything lower means recession.
China taxes heavily. Taxes on business are at 70% of profits. Individual tax fates are over 80%.
He forecasts an economic tsunami.
The main fact here is not the precision of the statistics. They are way too precise. But when a major economist in Hong Kong issues a warning, it should be taken seriously.
When China crashes, the so-called Chinese model will be discredited.
Let us not forget how long a government can use monetary inflation and censorship to sustain the illusion of prosperity. But a bubble always pops.
Several commentators have expressed broad agreement with Lang’s analysis.
Cheng Xiaonong, an economist and former aide to ousted Party leader Zhao Ziyang, said that high praise of the “China model” is often made on the basis of the high-visibility construction projects, a big GDP, and much money in foreign reserves. “They pay little attention to things such as whether people’s basic rights are guaranteed, or their living standard has improved or not,” he said.
Behind the fiat control of the economy, which can have the appearance of being efficient, there is enormous waste and corruption, Cheng said. . . .
Cheng says that for the last decade the Chinese regime has accumulated its wealth primarily by promoting real estate development, buying urban and suburban residential properties at low prices (or simply taking them), and selling them to developers at high prices.
Someone once said that 74% of the people to whom you quote statistics believe you.
For decades after taking economics classes in college I have seen people try to persuade others with numbers only to find that they are watching the movement of a glacier with a microscope. The people I am referring to are the subject of this article.
The common masses are easily fooled with statistics which are not necessarily wrong but, just portrayed in the wrong light; intentionally.
I do not doubt that China along with everyone else is going into the tank. We have seen so much manipulation with world economies that it is impossible to make any sense of what is really going on.
If you think that the "New World Order" is going to fix the problem, think again. Taking monetary control to distant lands and unknown boiler rooms without sovereign control is ludicrous. There will be heavy taxation without representation. There will be no recourse for anything that goes awry. It would be like trying to manipulate smoke and mirrors on another planet.
If you can trust world markets to do what domestic markets cannot, good luck, we are only fooling ourselves.
Chaing has been one that is predicting a major blow to the PRC because of the inflation rate and the heavy taxation but when you think about how much gold and how much debt the government is carrying and the increase in their military build up, the balancing act must be one hell of a show…..We could easily face deflation if this congress doesn't get off it lazy butt and act responsibly.
The New World order will take the money and run. China and the world is doing what we are doing spending without hope of repaying they just have better media control. Stock markets are a losing game few win lots lose……… The real question is when do we say enough is enough.
Dingle, Amen to that brother!
The inside scoop on China is indeed that they are faking their growth. They are developing cities which no one lives in. Their accounting cannot be trusted, just like Russia. They will fall and fall hard. The US will be the one economy again, left to rbuild the world. And we will.
Simple Physics: WHAT GOES UP MUST COME DOWN. China will fall under the weight of its fake economy but its massive debt is largely internal and when the crash comes, as it surely will, the Gov. will attempt to recover by calling in foreign debt. If we have gutless leaders we will also suffer. China will suffer food crisis like N. Korea but much worse because the land will not support population and it will never recover. Millions will die!!
Dingle, that was an excellent comment. When any type of government controls most of the economy in it's country, the economy of that country will eventually fail. Examples are the Soviet Union, Greece,Portugal,France, etc.
If our system of Capilalism is allowed to flourish, we will continue to be the richest nation in the world history.
I don't know what to make of China.
I go to China alot and can stay in Beijing at the swankiest Holiday Inn anyone has ever seen at $41 a night (obviously no tax).
10 years ago, Shenyang was not even on the map and now the whole city is under construction, with a business district that looks like Times Square (no exaggeration). Locals tell me that the town of Fushun (about 50 miles from the North Korean border) will merge with the city of Shenyang, yet if you go to Fushun you see old guys with donkey-drawn carriages!!!
I live in China and many of your statistics are unbelievable. The government keeps interest rates extremely low so it is impossible for interest on $7 trillion to be $2 trillion except over the total period of the loans. China may be a bubble ready to explode, but you need to make sure your facts are straight.
The economy can be fixed in the U.S. by the American people conforming to the edict in the Declaration of Independence that instructs to oust the form of government that is harming the people and to install a new form of government body. A system to select rather than elect one screened and tested individual from each state from thousands of entrants for a smaller and smar government cabinet making the biggest crooks no longer needed, the "Electoral College" as well there will be no need for the two party system on a National level sending the career politicians packing to make room for the fifty selected by the American people to lead into a prosperous future with salaries approved by the people for a period of four years at conclusion receive a generous severance package making room for next 50 being groomed. This can all be done with an executive order to initiate the system and approved by the people to set it in motion by way of a petition on internet that will, also eliminate the career politicians who are draining the American people through taxation to pay their huge pensions when they leave office. There is much to be done by the next president that will serve the American people by leadership, not dictatorial edicts.
China can barely feed itself and hardly ever could. that is why it's people are so expendable. That China only consumes 30% of what it makes would be a dream in the Untied States where we have to import that 70% that China doesn't consume. Of course it's going to crash – bridges to no where – and no quality control – rampant pollution (burning US coal – our biggest export to China besides interest payments on borrowed money).
but you have to remember that money is not a commodity – it is an idea, a means of or medium of exchange. we think that the printed paper or the coin in our pockets is money – no – it is just the means by which we trade one good for another – your work for a pack of cigarettes without having to, say, sweep the floor. A bag of rice which lets say in 1960 was 25¢ and to day is $1.25 – is still only worth what a bag of rice is worth. If the average pay for a year in 1960 was $6,000 (more or less) and today the average pay for a year is about $30,000 – how much is that bag of rice worth if you just use the "currency" as a percentage of income? This is why mandated inflation, minimum wage laws, doesn't make you any 'richer'. it simply drives up the medium of exchange for that item – the hamburger is still only a hamburger – now it apparently costs more to pay for that raise, then the government gets a higher sales tax on it, the worker will pay more for it and with the increase in wages may perhaps go into a higher tax bracket and the government which mandated the minimum wage will skim more tax money on the increased wage – you can see that ONLY the governments at all levels wins at the inflation game – while in fact even at that it loses also.
China is next to learn its fate with communism. So let it be written so let it be done.
Hey Obama. You see what Socialism will do for you. We too are going down this very path we need to STOP THE MADNESS.
I think you are right on this, what I see is the American people are tired of the American jobs going to China, they are tired of the Chinese junk.
I don't buy Chinese products unless I am desperate! It is so easy to go on line and find American products. I did have to go to 4 stores befor I found a pair of tennis shoes that were American made.
Food from China is ?? something I don't want to buy!
We need to balance the trade! We need jobs! Why doesn't the gov give the American car companies free land, and free taxes like the do foreign companies? One town was going to give a Chinese investor free land and free taxes if they hired 6 people. Guess who they wanted to hire? Family, not Americans! They would have been given a visa and moved to this town. The supervisors turned this down! Thank God!
I don't think any foreign country should be able to build a factory here.
Our factories should be set up so they can be converted to war material.
Would you want a vest, the police wear, that was made in China? Would you want our Military items made in China? or any foreign country!
Everything you pick up to buy is made in China. If you want something made in the U.S.A GO ON LINE AND LOOK!
I found American made single edge razor blades at Sears. The Mexican and Chinese ones are junk. Everything that I have bought that was Chinese made rusts. I bought Henckel knives, they were made in China, I don't put my knives in the dish washer! These knives pitted and started to get rust spots with in a week. I just noticed that the ones from Costco's are now made in Spain. The ones made in China have one guy on them and the ones made in Europe have two guys. I now have the knives with 2 guys, 5 years and no pitting or rust. The company may have pulled the plant out of China.
I do believe the article. Once I had heard that China was building ghost cities, now it makes sense as to why.
China recently refused to bail out the Euro.
Both the USA and EU are in severe financial straits thanks to politicians and bankers.
China has a long game. Western politicians need toconsider this.
Also, as the EU is now moving towards totalitarianism, perhaps the USA should be confirming Liberty and Democratic rules of law and speaking out against technocrats attempting to remove democratic accountability from Europe.
China and Global financial manipulators may be in cahoots!
If so, democract is under attack also as well as money markets!
very well said
If China crashes financially, we will get to see an object lesson in why continually rewarding the sucking class with perks, no matter how small, is totally unnecessary to the survival of the state.
@ gb regarding "prezelect". Yeah, it'w well said. BUT. It's a series of run on sentences. AND. There are glaring grammar problems. While I agree with the PREMISE prezelect states regarding the Declaration of Indendence, I'm concerned for the presentation. It needs polishing if I am to allow any real validity to it. Sorry. Misapplication of grammar and bad syntax leave me suspicious.
great idea! i have been espousing the idea of a "X-factor/America's got talent" reality system of choosing the new statespeople on all levels of govt.. Create regions in each state for state elections, regions in the U.S. for the purposes of a 'debate off'. All people are elegible to participate thus eliminating the issue of money, but they must take and pass an exhaustive qualifying exam to make it to the debate rounds. There is to be no partisan politics, debates are televised for free and a system of individual voting post-debate would need to be developed. The top 2 finalists move on to the next level of debates. Finally, the top finalist becomes pres. and runner-up v.p.. No more politicking as usual since there will be no need to fundraise, no smear campaigns, no donations, etc.. A truly participation driven event that would appeal to our reality tv oriented masses that crosses all boundaries. Just imagine a system based on abilities not corruption or dreams of personal gain!?
Over 40 million Chinese have died of starvation, just to get to where they are, do you not understand the Chinese? They intend to win"the game", that most of you do not even know you are playing !!! It`s called RISK !!!
If China goes onto the Gold standard, where will that leave the Western "fiat" economies? Flat broke !!! lol Everything will still be "made in China", but you will not be able to afford it !!! lol
I am no "moderate", so my comments probably will never make it through the censors !!! lol
If you do not vote for Ron Paul, then you better vote for Huntsman, as he already knows Mandarin !!! lol
There is a lot good comments, but I believe that our country has a whole is straying from God and we need to turn our moral compass back to a relation ship through Jesus Christ. Then and only then will we as a nation will be saved. Otherwise it's seem's that the voter, (like the blind leading the blind) will keep drinking the coolade, career politicians and those who think that they can use conventional wisdom to save us will keep leading this country to a pit. On the other hand those who put their trust in God, believe that this is just a place that we are passing through and that God will ultimately take care of them.
Those who think that a New world order is the answer should read Revelations, because (it seems to me that is the condition of our world that God's wrath is coming against). Those who hate Israel and want to through them under the bus should read what God thinks about Israel and what he will do when the world tries to go against the Israel.
George Soro's perhaps has good intentions but he is playing God,
He thinks he knows what is best for the world. The damage this man has caused is immeasurable (from the sources that I have seen). Nearly destroying the economy of country's including the English pound at one time. Possibly even was involved in our little stock crash a couple years ago. All I am saying with people is powerful as George Soros who seems to be acting as a leader of the World, (not saying he is the anti Christ)but wonder if he does not have a lot to do with the events that the Bible warns us of. He is an atheist, apparently giving funds to a organization that infiltrates the church bringing his liberal agenda in.
sounds very similar to the early stages of nazi germany. A giant shell game with the economy, put everyone to work & build a huge military. Next is to start a war Right before the whole house of cards comes falling down.
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