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China - It's Politics, Not Just Finance
Submitted by Sean Corrigan of Diapason Commodities,
Scanning the Chinese press, the sense is primarily that problems related to their dysfunctional financial system and the gross lack of personal accountability in its exploitation are being detailed everywhere. Troubles involving mutual guarantee companies in Whenzhou, commodity shippers in Qingdao and elsewhere, Ping An insurance execs, BOC/CITI 'money launderers' in Guangzhou, steel execs, trust fund sellers, stockbrokers front running orders via their personal accounts, real estate developers colluding with their local government buddies - you name it; and the whole superstructure is, of course, intricately interlocking and hence becoming systemically fragile.
Every day that goes by, China's "little Dutch boy" needs another finger to plug the new leak he caused by trying to stem the previous one. The risk is, he may soon run out of digits...
Against this backdrop, the regime is trying to launch reforms while not allowing the so-called 'bicycle' economy to slow down so much it falls over.
One key point here is that Xi's increasingly rigorous 'corruption' purge has totally paralysed decision makers so that, in fact, it is hard to resist the conclusion that all effort at reform has been completely grounded. This has gone so far beyond the bounds of what s routine that there was even some speculation I read that next move will come uncomfortably close to Li himself (via Xi's factional struggle rather than through the former's personal culpability).
No wonder Li is said to be screaming at officials to get of their backsides and DO something in his meetings with them
One element of Xi's extraordinary concentration of power in his own hands is that he may be putting the nation on a (precautionary) war footing, but the greater point is that the problems he has inherited are so entrenched that every attempted solution becomes a new problem in its turn, hence all the chopping and changing and all the conflicting signals being generated as to the true thrust of policy.
As for his crackdown, if the idea was to scare the previously unresponsive local cadres into compliance with Beijing's directives, he has WAY overshot that mark. No heads above the parapet now and hence precious little appetite to take bold action, further down the food chain.
Xi seems to have created his own 'tall poppy' moment in true Chairman Mao fashion which is hardly helpful when even the partial change in approach being implemented is exposing and undermining so much of the shady practices which were propping up the system previously.
Keep an eye on events in HK, too. The fear of a 'colour revolution' being instigated there will only add to paranoia over the unrest in the Muslim West and the sense of strategic encirclement off the Eastern coast.
Interesting times!
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Poor bastards have the exact same problems as us.
Chinese are not afraid of shooting the bankers unlike the USSA. I guess USSA has been pussified
That seems to be your theme this evening...go with it!
In China, yuan sam ting, yu pei sam wan!
WANTED!
======
I am preparing to write an article at my blog on the BRICs.
I need some help to make it a better article, I am looking for any Western businessmen/women who can provide me facts and guidance on Russia's economy, business & investment climate, corruption and related topics. Anyone interested in sending me information, quite possibly for publication is invited to gmail me at my name here at ZH.
Anyone sending material that I mention or publish will be attributed however you like.
Thank you! And back to this thread's regularly scheduled subject...
There's a woman on American thinker that posts articles there that seems to be a Russki-ite. A few posters there as well. Recommend that you ask around. Kim Zigfeld, and here's a recent article:
http://www.americanthinker.com/2014/07/putin_crushes_internet_expression...
She might be able to help. Also read the AT comments...very astute crowd there. May be some more leads.
Thank you for the lead, I will go look around. + 1
Why are so many over-the top critics of Putin [and - he deserves a lot of criticism, but much of what he gets is well beyond fair or reasonable] Zionist Jews? A few minutes on google will assure you that Zigfeld thinks Israel can do no wrong and Russia can do no right.
Does it have something to do with the fact that Putin, whatever his sins, took back much of Russian natural wealth essentially stolen under Yeltsin, overwhelmingly by Jews? Most of the oligarchs were Jews in a country where they are under 2% of the population... also true in Ukraine... it seems fair to wonder why, in the US, members of a group which are 2.5% of the population seem to be around half or more of the Russia-bashers in the MSM.
Just curious, is all.
Another option is the fact Russia has armed Iran, helped them with their nuclear energy and medical isotope programs, and basically prevented the US/NATO from easily toppling Assad and breaking up Syria (long a goal of the neocons).
Criticism is one thing - criticism from the Zionist right and Israeli 5th columnists is another.
---
The neocons became curiously interested in Chechnya a couple/few years prior to the Boston bombing which may just be a coincidence, surely, but one suspects that the sudden attraction to the Chechen cause by American neocon Jews had less to do with the Chechens than, ultimately, the perceived interests of Eretz Israel ...
http://rightweb.irc-online.org/profile/american_committee_for_peace_in_t...
AFRAID?
the asian nations have a reputation for being more genocidal than western nations.
that is why many rich folks in china are taking their wealth to the u.s. and europe, trying to take what they can out before the killing season begins.
and it will begin....
I have a skype friend from China. Guy is a structural engineer, 5 years out of university, still cant get a job be cause of corruption. Unless you're part of the system, you're out of luck.
He says things are dangerously close to exploding, if the leadership doesn't get it fixed pronto, thete will be riots soon.
Your moron friend has no idea he knows shit about what happens in his own country because news are blocked. There ARE riots in China everyday. There are about 20000 incidences involving more than 10000 people every year.
Didn't you just prove Carpenter1's point? They're quelling uprisings but the uprisings maybe increasing?
Either way, I am impressed at the stats you mention wherever you may have gotten them, perhaps the Chinese are not as centrally-mind controlled as one thinks?
We're way ahead of them. We have 90+ million people not working and 50+% of the population on the government dole. These guys are enjoying the good life with a side order of totalitarianism.
Is sound like USSA is prepare for war by create large draft pool of youthful unemployment!
Declaring a draft could be politically damaging.
Having an army of 'volunteers' because it's the only thing available looks way better.
Half of them would have trouble getting off their big fat arses
This is what happens when communists try on their capitalist big boy pants. What can be expected when a nation that has murdered 70 million of its citizens tries a taste of free markets and freedom. Works about as well as a herd of Missouri hogs playing their rendition of Swine Lake.
I wonder what happens when a more capitalist-leaning nation tries on their Communist big-boy pants?
I guess we'll find out soon enough.
I am afraid that you are right.
wie so phuc
Sum Ting Wong
In meiguo, eba li ting wong!
I have always suspected the Chinese system was completely rotten to the core with corruption- to a much greater degree than the system in the West, which is bad in itself.
The US is a bunch of pikers when it comes to corruption. But we're learning. Fast.
No offense, but the point I get out of all the posts I see about us, Europe, South America, China, shows me that where there is finance these days, there is corruption. The system is propped up, glued, and taped together with corruption. Could be it is as simple as "same as it ever was" I am not as confident about that.
I think each is learning from the other, and it is quite possible, each is cooperating with the other. The banker class so to speak.
Said more simply, it is bullshit that the US is not as bad as they are. I have that much faith in us, we are innovators and colonizers. Remember we outspend all the other militarys combined. Force. We do this. Now that is real financial hocus pocus.
Who are the pikers?
Yes. I find it hard to believe that it is coincidence that nearly every advanced economy in the world is simultaneously marching towards collapse.
Ordo Ab Chao
No coincidence IMO.
Unfortunately as I explore the Snowden dip-fed revelations and Omydiar links, I see the creeping announcement of technocracy's existence and the encroaching cashless society as matching this unified "march". Its a be fearful meme not inform you meme.
Now Australia is joining in - yeh we have high household mtg debt, but no reason for Hockey to dump the government debt ceiling unless its a planned move to bring us in line with high national debt levels across the western world so we can become Chinese eunuchs, (along with a rash of other changes).
Wish folks would following what politicians are Doing not what they are saying. Especially when said politicians have direct ties to banks eg Rothschilds, Duetsche Bank, Goldman Saachs.... just a few Aust's most senior pollies have ties to...
How much, and I'm asking not being rhetorical or glib, of China's economic problems of the past, just say 5 years, are due to their own policies [a construction/housing bubble, maybe?] and how much is due to more global and systemic problems?
I'd not be surprised if the US has done what it could to roll back or otherwise frustrate economic growth, but I'm not myself aware of any significant efforts to do so.
I guess I'm just wondering how much is true internal mismanagement, and how much is tied to global conditions and how you could sort of parse them. In other words, the over-reliance on exports, when other economies are tanking, is obviously part of the problem - but how much?
And regardless of the above - why wouldn't China start selling US treasuries off at a brisker pace - perhaps to an up and comer like Belgium?
;op
Belgium isn't buying Treasuries. They are the front, the shell, buying Treasuries on somebody else's orders. Perhaps the Fed themselves.
Does China have themselves to blame for the fix they're in? Damned straight they do. When you're a major nation-state with your own currency, you don't get to cry foul and blame somebody else. Well, you COULD, but you would be advertising your mistake and who would come to your rescue anyway? Big boy pants at that level.
Belgium isn't buying Treasuries.
Yeah, I didn't actually think so from reading stuff on ZH - but havent seen it elsewhere. Seems like it would be the Fed, not that they will let us know.
Hear you on the big boy pants. But does that mean they start selling off treasuries to get x-on-the-dollar return now, or are they too afraid to do so?
Wondering if the gold-backed yuan {or a new currency?} is in the pipeline, too, or if that's just bullshit.
Daffy China has been given a free ticket to rise up... Lima Agreement and all that, they've been fed our industries for decades.
They don't want a reserve currency but there is something going on otherwise they wouldn't be acquiring gold, working on a BRICS bank and huffing and puffing for the IMF to reset the SDR basket and the USA say-so in the IMF.
No doubt China does feel it is encircled in its eastern littoral seas but when you allow your citizens to trash Japanese businesses and insult them at every opportunity, bully Vietnam and the Philippines over some tiny rocks and reefs and claim the ocean right up their beaches you are being exactly friendly.
Somehat misleading. At no time has President Xi been more popular with the middle class of 100m. This class matters for the future direction of China. This class is not the farmers or students that politician can manipulate and Xi not their cult hero just someone who must deliver to their tip grievance -Corruption within the Party. The Party is at a low point in ite legitimacy with the People and its prime concern is with social unrests. Hence, all economic reforms can and will be sacrificed to ensure no social unrests. (You can see this with their stop/go stimulus to the economy all aimed at defusing the excesses of reforms that will hurt the lives of the middle class).
Undoubtedly, the economy is facing huge challenges and may tile towards a hard landing. Only the middle class can buffer the downturn by galvanizing sacrifices from the masses. On the much touted real estate decline, the middle class is quite confident that there shall be bailout on top of all other priorities on their key assets (homes) with directed aids from the Govt coffers.
HK is not a soverign country just a territory. HK has benefited from the 30 years of China's growth. Its importance to China today is that of a financial center. This financial center can at this stage of China's development be shifted over time to Shanghai. The Goldman Sach, etc desperate for the largesse from China shall move as incentivized. China Govt is far more sophisticated than to use force on HK..just reduce it to economic insignificance over time. The HK people are pragmatic and enterprising people not saddled by minority culture and religions and can be integrated just across the River to be in Shanghai. Just scour China's internet, The Central Govt is not even bothered to seriously curb the cheers to HK demostration. They know that it has no impact (6m HK people vs 100m middle class mainland Chinese and the latter has no sympathy for ingrates).This is no Arab Spring.
You are dealing with a different mindset who can play the long game with years of slow growth and is focused now on cleaning the debris in the system. Don't forget that they have the money to do the clean-ups. Xi hide knives behind smiles and is no moron. The Western media is wasting time in convering the 100m middle class to change focus and give up their dream to become an economic superpower under Xi.
Keep trading on soft landing but the jury is out on imminent economic implosion.
Somehat misleading. At no time has President Xi been more popular with the middle class of 100m. This class matters for the future direction of China. This class is not the farmers or students that politician can manipulate and Xi not their cult hero just someone who must deliver to their tip grievance -Corruption within the Party. The Party is at a low point in ite legitimacy with the People and its prime concern is with social unrests. Hence, all economic reforms can and will be sacrificed to ensure no social unrests. (You can see this with their stop/go stimulus to the economy all aimed at defusing the excesses of reforms that will hurt the lives of the middle class).
Undoubtedly, the economy is facing huge challenges and may tile towards a hard landing. Only the middle class can buffer the downturn by galvanizing sacrifices from the masses. On the much touted real estate decline, the middle class is quite confident that there shall be bailout on top of all other priorities on their key assets (homes) with directed aids from the Govt coffers.
HK is not a soverign country just a territory. HK has benefited from the 30 years of China's growth. Its importance to China today is that of a financial center. This financial center can at this stage of China's development be shifted over time to Shanghai. The Goldman Sach, etc desperate for the largesse from China shall move as incentivized. China Govt is far more sophisticated than to use force on HK..just reduce it to economic insignificance over time. The HK people are pragmatic and enterprising people not saddled by minority culture and religions and can be integrated just across the River to be in Shanghai. Just scour China's internet, The Central Govt is not even bothered to seriously curb the cheers to HK demostration. They know that it has no impact (6m HK people vs 100m middle class mainland Chinese and the latter has no sympathy for ingrates).This is no Arab Spring.
You are dealing with a different mindset who can play the long game with years of slow growth and is focused now on cleaning the debris in the system. Don't forget that they have the money to do the clean-ups. Xi hide knives behind smiles and is no moron. The Western media is wasting time in convering the 100m middle class to change focus and give up their dream to become an economic superpower under Xi.
Keep trading on soft landing but the jury is out on imminent economic implosion.
Hong Kong has suffered from the 30 years china imposing its will on her. Hong Kong was doing very well wothout China. Hong Kong thrives on its core value of respecting the law. Only short sighted self centered Chinese would think the dysfunctional financial system in Shanghai can replace that in Hong Kong. If a contract is signed, it will be respected. If a shop sells you a product it will back up the product with the reputation of its shop. It will be sued if it cheats. Try to do that in Shanghai.
Little wonder Chinese parents send their kids to school in Hong Kong. You can argue all you want but try to explain the long line of little kids queue up to cross the borders to go to school daily. The parents vote with their kids feet.
Little wonder tens and thousands of Chinese cross the border daily to Hong Kong to buy up everything from milk power to instant noddle to anything you can imagine so they can sell it for a big profit in China.
The Chinese government has on record expresses its fear that what happens in Hong Kong can spread to China. However, I am sure Hong Kong people have no interest in influencing the Chinese people. They look down upon them for their mindless embrace of money and power. These people have been totally brain washed and not worthy saving. Hong Kong people struggle for themselves. They are not trying to save the Chinese serfs.
China had effectively been supporting the USA (by buying our treasuries) until 3 years ago. Now they buy what gold they can get.
I suspect the entire monetary system is due for a shake up...it will not be just China. No one can pay dollar debt unless the Fed goes crazy and even that has it's limits.
My guess is new currencies almost all the way around.
The ability to 'just print money' is a greater temptation than any population can resist. A system with some penality for 'just printing' must be found or we will keep doing this craziness over and over.
Much of the recent growth in China after 2008 came from a massive 6.6 trillion dollar stimulus program that expanded credit and poured massive amounts of money into the system. This money encouraged expansion and construction with little regard as to real demand or need. Like a plane on autopilot China continued in the direction it had been on.
Now China finds itself in a credit trap. For years the people of China have had the habit of saving much of what they earn but the low interest rates paid at banks has not rewarded savers. With few investment options much of this money has drifted towards housing and driven housing prices sky high. The economic efficiency of credit is beginning to collapse in China and the unwinding of China’s giant credit spree could be very painful. More in the article below.
http://brucewilds.blogspot.com/2014/03/china-and-great-credit-trap.html
I love the anti-China bear-bating which is constant.
China's economy doing great: It MUST be a bubble, it's doomed to fail
China's economy slowing down and finding a sustainable path: HAHAHA It's all crashing
China's government has corruption: Oh look at how horrible the government is
China's government cleaning out corruption: They MUST be preparing for war, the government is collapsing
China's military sufficient for primary duties: Haha, backwater piece of shit that can't project any power
China's military undergoing modernization: They MUST be preparing for WAR!
China's infrastructure constructed in a reactionary fashion: Look how low quality and chaotic it is!
China's infrastructure constructed in a preemptive fashion: Ghost city, empty roads, ghost trains, look at all the corruption (we'll ignore the story where it hits capacity in a few years)
China develops domestic anything: If it's a stepping stone development, it's "chinese trash", if it is in anyway good, it MUST be a copy of stolen tech (again, ignore all previous development that led to it)
China attempts to gain market access to the US: China MUST be spying, it's a trap! Shut it down! National security!
China blocks a US attempt to engage in espionage and psyops: Corruption, Anti-competitive, protectionist, etc. etc.
China dumps aid in Africa and SEA with no strings attached: China is being imperialist and evil
China dumps aid with ANY strings attached: China is being imperialist and evil.
China aid anything: Undoing all the "good work" by the US.
US spies on China and makes a show of force just barely in international waters: Exercising freedom of navigation and nothing else, how DARE you interfere with the US exercising rights under treaties it never agreed to.
China deploys a single ship or plane anywhere even near US fleets or interests: China is saber rattling, spying, instigating tension, doing something wrong.
It just goes on and on and on, it's bear-bating. There is no choice China can possibly make on any issue which will not be hit with propaganda and derision. None. The only event which would ever have any praise would be adopting a political system approved by the US, working as a US puppet, submissive to US interests, willing to inflict self-harm at all times to the benefit of US interests. So, in fact, if you see praise for China coming from the US propaganda machine, it's nothing but a sign that China is doing something stupid and not in the interests of China.
This isn't anything new either. It's been going on for hundreds of years. And it's not only China. The most recent example is Russia after the fall of the USSR. The US rushed in with "advisors", demanding "reforms" geared towards destroying the viability of Russia as a nation. With the goal being to break it up entirely. As long as Russia went along with it, they got praise from the US. Then Putin came along and started cleaning up the mess the US created... oops, Russia's evil again. The vested interests just so happen to also control the US media. Therefore they can control the tone of the propaganda, which the sheep buy into and the politicians are "forced" to react to to get elected (but they are, of course, bought and paid for by those same interests in the first place).
It's all bullshit. Any nation which dares to be isolationist is a threat. Any nation which promotes any "values" not in line with the US stance is "evil", especially if they happen to control any resources or land which the US or US interests want unfettered access to. And so it goes, on and on and on. Prior to the US being insane it was the UK, which is primarily where the model was copied from. It all works as long as the unwashed masses are unthinking sheepish retards, and history tends to show that that is a constant.
Politically, there is pressure from the US to turn China into a suizeranty; the problem for China is that it is communist and America is a leftist country, making it difficult to resist. Russia wisely is pushing hard right in order to move the battle with the US onto cultural, religious and moral grounds. China has to throw away Mao and take a right-turn if it wants to resist the US combination of hard and soft power.
On the economy, it is a classic credit bubble. There are lots of people who think China could well be the leading economic power in the coming decades, myself included, but still see a credit bubble of historic proportions. The U.S, Japan and Europe all have huge debt burdens as well. I expect China will go through a massive crisis first. It will be a deep economic recession. The currency will devalue and China will emerge with a clean balance sheet, large gold holdings and an extremely competitive economy. Then it will be Japan, EU and then finally the U.S. the go through even larger crises.
laomei
China is hardly isolationist. Its got great deals on resources across the globe and a great bump from past free trade agreements like the Lima Agreement. Its economic growth has major issues like everyone else in this ponzi scheme, but its hard to ignore it growing resource access and economic clout across Africa, Asia, South America - something is a miss, if the USA was really policing the world (and not criminal cronies) this clout seems unlikely to be allowed.
Will a currency reset really harm Chins as much as the USA? I doubt it, there are vast resources its acquired globally with little resistance. I ponder this often given my knowledge of southern Africa and the horrible actions of the Brits and later US to control the very same resources -now its OK to share? PLEASE!!!... I smell a set-up especially with the USA's teleprompter president intentionally backing the USA into a corner.
Generally speaking, when it comes to financial crises that have a global scale, it tends to be FIFO as long as the FI actually addresses the problems and reforms to stop them. The problem at present is firming up social stability prior to undertaking. As higher unemployment, some inflation, and higher prices on safe hard assets is more or less guaranteed. Those conditions create an opportunity for intelligence agencies to provoke significant instability to jeopardize the end result. Overthrowing a government however, does not put people back to work, nor does it solve inflation or make anything more affordable. The only case where that is even possible is when an economy has been so utterly controlled and manipulated that there is a massive pentup supply that has been artificially suppressed. That ain't the case in China. The US however, would LOVE to see a China disaster. And HK is the current staging ground with CIA-front NGOs and CIA-funded "activists". Trying to rile up crowds to protest economic conditions which rather than being artificial are just merely reality. There's one of your "pivot to asia" prongs, with the other being riling up vietnam, japan and philippines in an attempt to provoke China into a position which can be exploited politically.
The US isn't really leftist at all. Perhaps, from your perspective it might be, but it's not and it never has been. Compared to just about every single industrialized nation, the "leftists" would still be considered radical right. The system the US is under is flat out textbook fascism.
Going back to WW2, the idealogical conflict between Germany and the USSR was one of private property. The USSR believed that everything should be owned by the state and managed by the state in trust for the people, and in return ensure living standards for the people including healthcare and retirement. Centralized control of the economy which is planned out. The joke is that before everyone had money and nothing to buy, but now there's everything to buy and no money. They pretend to pay us, we pretend to work. That was the unsolved inherent flaw. Centralization limits supply and is slow to respond.
The Nazi view, the view of fascists, is that the government has no place in directly controlling the economy, but rather services should be privatized as much as possible. This privatization (to insiders of course), boosted working capital and freed up the budget, allowing the government to focus more on war while being able to contract projects out to various firms. As per the socialist aspect, this was always a misnomer. It was added to the party platform in 1927 to gain the support of the unwashed masses. They had no power at that time, but selling socialism to a desperate people is easy... fancy that, a politician lied on the campaign trail.
Are you starving? No? Are you able to partake in some pleasure? Yes? Fine, that's more than enough socialism for you!
America has ALWAYS had a hard-on for fascism. Prior to US involvement, there was TONS of support inside the US for it. To the extent that there was that whole "Business Plot" coup attempt, which while subverted, was covered up... pretty easy to do seeing as the media was more or less controlled by... shocker, the fascists.
WW2 forced a rebranding of the term. Afterall, just about anyone could easily see the parallels if allowed to. Racial issues, Hitler just took it to a level that quite a few in the US could only dream of at the time (everyone hated jews and minorities anyways), privatization and low taxes on the rich afterall, were the source of the "roaring 20s" (which brought about the great depression.. but the causes of it were not all that public yet). Fascism simply could not be defined as anything tangible or concrete, it had to simply be evil and bad and vague.
And that rebranding survives to this very day. Communism is based on the notion of the Paris Commune back in 1871. The notion that a relatively wealthy and well-to-do economy could, rather than struggle and compete and cause suffering, could come together and effectively self-rule sharing resources etc. etc. Marx with his Marxism was all about identifying the key problems with Capitalism, not so much providing solutions. While Communism, the main problem is that a poor and desperate people are keen to try it because hell, they have nothing to lose, and a rich industrialized people, while it would be to their overall benefit are not keen to gamble everything, especially with vested interests that like the status quo.
Claiming the US as "socialist" or "communistic" or "marxist" is a flat out lie, it's anything but. It's far more fascist. Capitalism and Fascism go hand in hand, as Planned and Communism goes hand in hand. Communism is a political system derived on the basis of Marx-based criticism of Capitalism and an implementation to avoid the inherent outcome of such a system.
A planned economy only really suffers from being able to react fast enough and coerce the populace to go along with it. Outright force can be criticized as "slavery" and oppression with no freedom, as only the state and its policies matter.. the state tells you what is needed from you and you must comply. The force aspect of it only really comes into play when there is a disconnect with reality. Technology and reporting however, as well as flexibility can overcome this if taken advantage of. Such is the increasing reality on the ground in China. Respond to the public need with plans rather than ambition, allow for capitalist ventures to fill the gaps, incentivize rather than force to overcome planning issues.
The credit bubble in China. Here's the problem with most analysis of it. China has full and complete control of its own currency. Literally overnight, the government can just take over the bad loans from the local governments and write them off. Most loans are from state owned banks directed towards local government and government-owned enterprises. The government can easily take them all off the books, let the state owned banks transfer the debt to the government in exchange for paper accounting, and boom, done. No credit bubble anymore. It's money the government loaned to itself for all intents and purposes. For industry which is no longer desired, they can let it rot and have domestic funds pick it apart. For development projects which are failing, generally they allow them to fail, auction off the assets and again, done deal.
Housing prices falling... this is not an "oops, the bubble popped!" situation, this is a direct consequence of the government enacting policies to cool it down and deflate it as much as possible. If you had any clue of what it takes to buy property or multiple properties in China right now, you would know this. Lift a few regulations again and it can take off. This is why Chinese are now buying overseas, not just to diversify, but because it's fucking hard to buy more properties domestically due to regulations.
All the commenters missed a key section of the article - "he (Xi) may be putting the nation on a (precautionary) war footing . . ."
Xi knows that the eradication of corruption throughout the government and the military is essential if China is involved in war with the US/Japan.
On the Chinese evening news for more than a year, military exercises, naval training, and US war strategy are being discussed, analyzed, and debated. US and Japanese weapons systems and equipment are displayed and explained daily on TV to the public.
China knows that the US/Japan are preparing for war. Xi is trying to get his house in order.
The American public, as gullible as they are, will be presented with a false-flag event to justify the coming war in Asia.
Jackie Chan's new movie:
"Flying Tiger, Floating Pig"
China has to embrace true free markets and move away from corporate communism, Businesses need to stand are fall on its own and not be subsidized by back door loans from government owned banks. But for that to work those new free market businesses need to be protected from being crushed by the existing old corporate communists using debt to force them out of business by pricing good and services bellow cost.
China will have to simply declare certain industries off limits to existing companies to allow free market system to take hold. then grow that free market area of ecconomy slowly to include other existing industies.This goes against everything they have come to believe though. So first they have to embrace the idea that the way they have been doing things for past few decades simply wont work in the future. Sense large majority of of population simply isn't ready to here that it makes implementing needed changes nearly impossible.
The other choices are japanese style stagnation are more likely repeated germen style hyper inflation that will be repeated every 10-20 years in order to reset debt levels to a low enough level to start the debt cycle over again.