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Showing posts with the label Chinese economic crisis

China’s contracting economy expands people’s wrath against the CCP regime (Credits- TFI Global)

Is the Chinese economy moving for a crash?

Image credits- Wikimedia Commons / Author- Christophe Meneboeuf China is heading for a massive economic crash. Due to the growing credit problems, is the Chinese economy going for a massive crash. The National Interest has dealt the subject in an extensive article. Toread the same, click here

China Risks Rise With Shadow Bank Loans – Analysis ( Source- Eurasia Review / Author- Michael Lelyveld)

Image credits- Wikimedia Commons Source- Eurasia Review Author- Michael Lelyveld China’s growing debt levels have continued to raise doubts about the country’s financial management after warnings that shadowy lending practices are putting banks and investors at risk. The government has waged a publicity campaign to calm financial concerns since March, when two international bond rating agencies lowered outlooks for China to “negative” from “stable,” citing slow reforms and faster loan growth. The findings by Standard & Poor’s Ratings Services (S&P’s) and Moody’s Investors Service were followed by a warning from Fitch Ratings in April that debt levels had become “a mounting source of systemic vulnerability.” The government dismissed the reports last month after announcing that China’s gross domestic product rose at a 6.7-percent rate in the first quarter, keeping within the official target range. The results proved that the rating agency “pessimism”

China’s Coming Mass Layoffs: Past as Prologue? ( Source- The Diplomat / Author- Shannon Tiezzi)

Image credits- VOA / Author Source- The Diplomat Author- Shannon Tiezzi China’s minister for human resources and social security has said that China will lay off 1.8 million workers in the coal and steel sectors, part of an overall plan to reduce overcapacity and streamline state-owned enterprises. Reuters, citing anonymous sources close to China’s leadership, puts the figure much higher, at 5 to 6 million in layoffs over the next two years. Beijing is aware of the risks such massive layoffs pose for social stability, and it’s already moving to control to damage. A Chinese official recently announced that the national government will set aside 100 billion renminbi ($15.3 billion) to help find new employment for those who lose their jobs to the restructuring. On Wednesday, a spokesperson for the National Committee of the Chinese People’s Political Consultative Conference, which begins its annual session tomorrow, assured journalists that the job losses would be “te

Will 2016 Bring the Collapse of China’s Economy? ( Source- The National Interest / Author- Gordon G. Chang)

Image credits- Wikimedia Commons Source- The National Interest Author- Gordon G. Chang Last Monday, at the conclusion of China’s closed-door Central Economic Work Conference, Beijing’s public relations machine went into high gear to show that the country’s leaders had come up with a viable plan to rescue the economy. Unfortunately, they do not now have such a plan. In reality, they decided to continue strategies that both created China’s current predicament and failed this year to restart growth. The severity of China’s economic problems—and the inability to implement long-term solutions—mean almost all geopolitical assumptions about tomorrow are wrong. Virtually everyone today sees China as a major power in the future. Yet the country’s extraordinary economic difficulties will result in a collapse or a long-term decline, and either outcome suggests China will return to the ranks of weak states. As an initial matter, China’s current situation is far worse tha

The Rise and Fall of Shadow Banking in China( Source- The Diplomat / Author- Sara Hsu)

Shanghai stock exchange ( Image credits- Wikimedia Commons / Heurik) Source- The Diplomat Author- Sara Hsu The conditions that gave rise to shadow banking in China before the bursting of the real estate bubble were unique; a finance-fueled stimulus package, coupled with moral hazard, under changing financial regulations, produced a shadow banking system that fomented institutional risk and threatened to bring about systemic risk. This was tightly managed by the Chinese government, which monitored developments, allowing some freedom while reining in the shadow banking sector when its costs outstripped its benefits. Shadow banking, which rose after the global crisis hit, appeared to be a matter of political expediency rather than careful planning, and its decline was absorbed into the greater concept of the “New Normal.” Shadow banking lost its luster and converted from a lending boom into a debt debacle that was absorbed under the umbrella of restructuring. As a br

China's Potential Pitfalls #2: The Limitations of China’s Political and Economic Models ( Source- The Diplomat / Author- Xue Li)

Image credits- Wikimedia Commons / Author Source- The Diplomat Author- Xue Li After enjoying rapid development for nearly 40 years, China is at a turning point in terms of both economic growth and social development. In this series, Dr. Xue Li examines the five most critical challenges and potential pitfalls China faces today. See the first piece here. More than 30 years have passed since China began its reform and opening up, but it has yet to create a political and social model for sustainable development. On the economic side, by and large the market economy has taken the leading role, but there are some serious shortcomings. The government still intervenes too much in the economy. This problem of improper intervention in the economy has not been solved. To cite just two examples: First, the stock market bears clear signs of being a policy-driven market. The recent classic example is the government’s violent intervention to rescue the market Regrettably, n

China's 'Silk Road' Initiative Is at Risk of Failure ( Source- The Diplomat / Author- Moritz Rudolf)

China- Kazakhstan border ( Image source- Wikimedia Commons / Author- Yaohua 2000) Source- The Diplomat Author- Moritz Rudolf The Silk Road Initiative is the major project for Chinese President Xi Jinping. On every state visit and within every diplomatic forum, he has promoted his idea of “One Belt, One Road” (OBOR). Beijing wants to create China-centered infrastructure networks in order to expand its own economic and political influence in Eurasia. But the time when the country was able to make economically unprofitable investments on the basis of political motives is long gone. Beijing had intended to invest more than $900 billion in infrastructure expansion in Eurasia. However, the money is now needed to stabilize its stagnating economy and nervous financial markets. China‘s currency reserves decreased drastically in August. Due to financing difficulties a number of infrastructure projects have come to a standstill. For example, the gas pipeline known as “Power

Could China's Economic Troubles Spark a War? ( Source- The National Interest / Author- Ted Galen Carpenter)

Image credits- Wikimedia Commons Source- The National Interest Author- Ted Galen carpenter  Global attention has focused on the plunge in the Shanghai stock market and mounting evidence that China’s economic growth is slowing dramatically. Moreover, the contagion appears to be spreading, characterized by extreme volatility and alarming declines in America’s own equity markets. Those worries are compounded because there always have been doubts about the accuracy of Beijing’s official economic statistics.  Even before the current downturn, some outside experts believed that Chinese officials padded the results, making the country’s performance appear stronger than it actually was. If China is now teetering on the brink of recession, the political incentives for officials to conceal the extent of the damage would be quite powerful. The focus on the possible wider economic consequences of a severe Chinese economic slowdown is understandable, since the ramifications could