China's Government Self-Immolation Progresses As We Expected

Tyler Durden's picture




 

Just a month ago we warned that all was not well in the political elites of China. Critically, expectations of some coordinated and massive stimulus to save the world were far overblown since "the last thing Hu & Co. would want in their final months in office would be to unleash another oligarch-enriching orgy of speculation". Sure enough, as Reuters just reported, 'China's ruling Communist Party is seriously considering a delay in its upcoming five-yearly congress by a few months amid internal debate over the size and makeup of its top decision-making body as the party struggles to finalize a once-in-a-decade leadership change.' The delay will likely further unnerve global financial markets whose perception of Chinese politics as a well-oiled machine has already been shaken this year by the extraordinary downfall of an ambitious senior leader, Bo Xilai, in a murder scandal.

Reuters Exclusive: China considers delay of key party congress: sources

China's ruling Communist Party is seriously considering a delay in its upcoming five-yearly congress by a few months amid internal debate over the size and makeup of its top decision-making body, sources said, as the party struggles to finalize a once-in-a-decade leadership change.

 

The two most senior posts, of president and premier, are not considered in much doubt. But any delay in the congress, no matter the official reason, would likely fuel speculation of infighting over the remaining seats in the nine-member politburo standing committee which calls the shots in China.

 

...

 

One long-time and well-connected U.S.-based investor in China said there were two ways to interpret a congress delay.

 

"One is to say that the leadership is in turmoil and that China is fighting a serious challenge to reform. That will be quite upsetting to the markets, as it may be seen as a challenge from the like-minded allies of Bo Xilai," he said.

 

"The second interpretation is that China is trying to cope with the challenges posed by the shift in the global economic order and does not want to move rashly. That is not positive for markets, either," said the investor, who declined to be named.

 

As Sean Corrigan recently noted (and now seems extremely prescient):

Even if we dismiss the wilder rumours swirling about the offshore websites and the fringes of the blogosphere, it is painfully clear that something very unusual and potentially disruptive is afoot. Given our overdependence on the myth, as much as on the reality, of a China rising inexorably and uninterruptedly to a resource-hungry world primacy over the next decade or two, the interplay of factional political infighting with potential economic meltdown could be the defining influence on the world’s affairs in general, much less on the enthusiasms of those active in its financial market playground, in the coming months.

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Tue, 05/08/2012 - 13:32 | 2407277 LawsofPhysics
LawsofPhysics's picture

Apparently, Americans haven't cornered the market on greed and corruption, yet.  Imagine that.

Tue, 05/08/2012 - 13:35 | 2407300 francis_sawyer
francis_sawyer's picture

The Chinese "invented" paper currencies... We just turned them into a contact sport (with ring card girls in scantily clad outfits to inform us of what round we were in)...

Tue, 05/08/2012 - 14:00 | 2407423 AnAnonymouses
AnAnonymouses's picture

Chinese citizenism at work!  China citizenses all really want to be US citizenses!  Struggle for power all about yuan and gold to buy good land elsewhere!

Tue, 05/08/2012 - 14:06 | 2407435 Manthong
Manthong's picture

Oh, our little Chinese friends will be just fine.

They only need to create 2,000,000 new jobs PER MONTH for at least the next THREE YEARS to keep everything together.

That should be a cake walk with the help of a strong US and EU.

http://www.globaltimes.cn/business/china-economy/2010-12/598403.html

Tue, 05/08/2012 - 14:11 | 2407466 Upswaller
Upswaller's picture

OT, sorry, but has anyone seen CD lately?

Tue, 05/08/2012 - 15:38 | 2407852 cougar_w
cougar_w's picture

"Seen" as in down at the pub? No. On the ZH boards? Yes indeed.

Wed, 05/09/2012 - 22:25 | 2412009 sullymandias
sullymandias's picture

2 million jobs per month for 3 years? Easy. Occupy Kazakstan. Then Pakistan. Then Iran. Then Afganistan. Etc.

Tue, 05/08/2012 - 14:14 | 2407473 Joe The Plumber
Joe The Plumber's picture

I will give you a green for a somewhat original thought. Yep the chinese are just like us or want to be

Tue, 05/08/2012 - 14:23 | 2407498 Dr. Acula
Dr. Acula's picture

"The capsules were made in northeastern China from babies whose bodies were chopped into small pieces and dried on stoves before being turned into powder... some people believe them to be a panacea for disease, the customs service said in a statement.

The capsules of human flesh, however, contained bacteria and other harmful ingredients."

 

http://www.telegraph.co.uk/news/worldnews/asia/southkorea/9250438/Pills-...

 

"The San Francisco Times reported that tests carried out on the pills confirmed they were made up of 99.7 per cent human remains.

The tests were successfully able to establish the genders of the babies used."

http://www.dailytelegraph.com.au/news/thousands-of-pills-filled-with-pow...

Tue, 05/08/2012 - 14:45 | 2407606 AnAnonymous
AnAnonymous's picture

Buy land? Under US citizen special deals as offered to the Indians then.

The pic shows the good progress of US citizenism in China though. Doing what a US citizen does.

Tue, 05/08/2012 - 14:57 | 2407678 Sandmann
Sandmann's picture

Under US citizen special deals as offered to the Indians then.

 

Sure...they get Casinos

Tue, 05/08/2012 - 15:02 | 2407703 AnAnonymous
AnAnonymous's picture

Part of the Ponzi, part of the ponzi...

Tue, 05/08/2012 - 16:22 | 2408050 akak
akak's picture

But without Ponzi, there are no "Happy Days"!

Wed, 05/09/2012 - 01:22 | 2409144 Oh regional Indian
Oh regional Indian's picture

The new Trinity of Joy-full-ness....

Happy Days

Happy Hours

Happy Endings.....

ori

Tue, 05/08/2012 - 14:50 | 2407635 LFMayor
LFMayor's picture

comedy gold, with a spritz of delicious irony for flavour.   Well done sir!

and to the real AnAnoms....  a most heartfelt FLUCK YOU, ASHWHOWLS.

Tue, 05/08/2012 - 13:40 | 2407327 Dear Infinity
Dear Infinity's picture

Blythe Masters: Cancer Raising Money For Cancer

To sum it up, the internet is DESTROYING WAGE ABRITRAGE.

Tue, 05/08/2012 - 13:55 | 2407395 Joe The Plumber
Joe The Plumber's picture

U have it backwards. The internet promotes wage arbitrage by making it easy to take work from highly paid employees and give it to low paid employees

Tue, 05/08/2012 - 14:06 | 2407448 Dear Infinity
Dear Infinity's picture

thanks for catching that

Tue, 05/08/2012 - 13:32 | 2407278 apberusdisvet
apberusdisvet's picture

Hu's on first?

Tue, 05/08/2012 - 13:47 | 2407361 mayhem_korner
mayhem_korner's picture

 

 

Tea, any mon?

(it's weak, I know)

Tue, 05/08/2012 - 13:52 | 2407378 Mary Wilbur
Mary Wilbur's picture

Truly clever and very funny.

Tue, 05/08/2012 - 16:41 | 2408065 akak
akak's picture

 

Hu's on first?

I don't know exactly where Hu is, but if the game is being played in China, you can be sure that Pu is all over the field.

Tue, 05/08/2012 - 18:49 | 2408459 TheFourthStooge-ing
TheFourthStooge-ing's picture

Being to in referencing of Mr. Jintao Hu, Hu in roadside stand gloriously inventoring of Pu Pu Platter patriotic Chinese citizenism recipe.

 

Tue, 05/08/2012 - 19:12 | 2408471 akak
akak's picture

Having now face if the decisioning for among them sublimely enticing dried fetus health-making capsules, fried puppies and kitten tenders (oh! the goodness tastings they!), or beforesaid Pu Pu platter (served on roadside, in authentic fashion), difficultness on the choosing are do not but that exceeds length of Great Wall of Chinese Citizenism denialism, many much so.

Tue, 05/08/2012 - 13:33 | 2407283 carbonmutant
carbonmutant's picture

Will America follow suit?

Tue, 05/08/2012 - 13:59 | 2407411 mayhem_korner
mayhem_korner's picture

 

 

When will America follow suit?

Fixed it.

Tue, 05/08/2012 - 14:03 | 2407439 carbonmutant
carbonmutant's picture

Late October?

Tue, 05/08/2012 - 15:43 | 2407878 cougar_w
cougar_w's picture

Of which year?

Seriously. I think the PTB are going to go all-out to make the upcoming election into a grand party and mutual admiration society. The debates (there will be) will be rigged, scripted and pre-chewed. The rallies (such as they are) will look like scenes from Norman Rockwell. The voting day turnout will be policed to within an inch of despotism.

They do not care who wins. However they care a great deal about keeping the ship of state from capsizing under a rogue wave of populist outrage. And this, they will combat tooth and nail.

Tue, 05/08/2012 - 16:37 | 2408090 jumbo maverick
jumbo maverick's picture

I sure hope Aretha Franklin shows up again at the inauguration wearing another spectacular hat. Circus and bread.

Tue, 05/08/2012 - 13:33 | 2407284 francis_sawyer
francis_sawyer's picture

Calling WB7...

That "kick the can" foto from the other thread is valid here too (just replace the Obama logo with a Chi-Com one)...

Tue, 05/08/2012 - 13:41 | 2407333 williambanzai7
williambanzai7's picture

Chinese Proverb: A fool is the guest who insults his hosts.

Tue, 05/08/2012 - 13:52 | 2407376 Chump
Chump's picture

ROR!  Sounds like typical US citizenism if you ask me!  Made me laugh!

Tue, 05/08/2012 - 14:14 | 2407476 Dr. Engali
Dr. Engali's picture

Chinese proverb: Foolish man give wife grand piano, wise man give wife upright organ

Tue, 05/08/2012 - 15:27 | 2407799 williambanzai7
williambanzai7's picture

The version I use: how are women and pianos alike!

Either they are upright or they are grand.

Tue, 05/08/2012 - 16:16 | 2408023 Catch-22
Catch-22's picture

Tulips on organ preferable to roses on piano

Wed, 05/09/2012 - 01:26 | 2409149 Oh regional Indian
Oh regional Indian's picture

Except that in India, in Hindi, Rose on the Piano would translate to Every Day on the Piano.

Then?

ori

Wed, 05/09/2012 - 06:36 | 2409372 Catch-22
Catch-22's picture

Works for me...

Tue, 05/08/2012 - 13:39 | 2407312 Sandmann
Sandmann's picture

China is probably have a quiet chat with Bank Auditors to ask who financed all those See-Thrus in Shanghai and how they intend to make the books look beautiful. Long before the Chinese went bust making iPhones and LCD displays they went down the drain making Ming vases - of which they had a monopoly. China will crash and burn but the Corporation of The City of London will have invested the funds of The Elite in Canadian forests and US gas fields long before the IMF sauys "We didn't realise"

Tue, 05/08/2012 - 13:44 | 2407340 Aziz
Aziz's picture

China: $3 trillion of FX reserves (and growing) away from being bust.

Tue, 05/08/2012 - 13:52 | 2407368 GeneMarchbanks
GeneMarchbanks's picture

No, it is as the man states. Those 'reserves' cannot be deployed in any meaningful way.

http://www.atimes.com/atimes/China_Business/ND20Cb03.html

To aim is simply to suffocate over the long term.

http://www.atimes.com/atimes/China/NE09Ad01.html

Tue, 05/08/2012 - 13:58 | 2407404 Aziz
Aziz's picture

Nope. You don't go broke as a nation by running huge current account surpluses, not to mention massive domestic savings rates. That's like saying an obese guy is going to starve because he's eating too many hamburgers.

Tue, 05/08/2012 - 14:01 | 2407434 GeneMarchbanks
GeneMarchbanks's picture

Interested in epistemology are you? Hamburgers and 'surpluses' aren't the same 'thing'.

Tue, 05/08/2012 - 14:09 | 2407450 Aziz
Aziz's picture

You don't go broke by accumulating huge piles of cash.

I can talk about China's problems all day (central planning failure, misallocation of capital, although as a centrally-planned economy I think they are marginally better at it than the dumbshit central planners over here), but "going broke" isn't one of them. 

If we're gonna look for countries going broke, let's look at the consumer nations and the debtor nations, and the welfarist nations, starting with Britain and America.

Tue, 05/08/2012 - 14:16 | 2407482 GeneMarchbanks
GeneMarchbanks's picture

You don't go broke by accumulating huge piles of cash.

That doesn't mean that you can't. There are no 'huge piles of cash' only promissory notes. Sure you can recycle that into gold, military spending, Aussie minerals and even Vancouver housing but that guarantees nothing.

Tue, 05/08/2012 - 14:27 | 2407535 Aziz
Aziz's picture

I'd love to see the U.S. try and default on those promissory notes, I really would. What percentage of U.S consumption goes through China now? >95% of U.S. consumption involves Chinese labour or resources, or components or sub-components, even the "Made in America" stuff a lot of the time is Chinese components.

That's the state of global trade, and that's what you get for relocating your manufacturing base into the backyard of a hostile foreign power who fucking hate the West for the opium wars....

I know what usually comes next...

"We have thermonuclear weapons, we can default on whatever we want"

Typical American hubris. 

http://www.zerohedge.com/news/guest-post-treasury-bubble-one-graph 

Tue, 05/08/2012 - 14:36 | 2407571 GeneMarchbanks
GeneMarchbanks's picture

Didn't read my links did ya? 'Default' has already happened.

Tue, 05/08/2012 - 14:48 | 2407627 Aziz
Aziz's picture

Not really. The dollars are still dollars. They're still using them to buy African resources and farmland.

Must be why the U.S. imperialists are selling that Kony 2012 bullshit to get America deeper into Africa to compete for resources. Lucky for the Chinese they don't have to play along with the socially aware bullshit, they do imperialism as imperialism without the humanitarian pretensions.

Tue, 05/08/2012 - 14:56 | 2407668 GeneMarchbanks
GeneMarchbanks's picture

'Not really'

Dollars are indeed dollars, the tautology still doesn't help your case. You are aware that there is no pile of FX 'cash' stashed away with large armed Chinamen watching over it?

Imperialism? That's another topic for another day.

Tue, 05/08/2012 - 14:56 | 2407671 Sandmann
Sandmann's picture

They're still using them to buy African resources and farmland.

 

Yes but they are Neo-Colonialists who send Chinese to act as Masters over Africans....and we know how that will end

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