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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
TSA gropee's picture

Corruption is systemic in China at all levels. You effin' assholes wrote the book on it. I know, I deal with the Chinese business culture every day while I'm here. Shit every time I go back home I see more and more of the Chinese trample on one another culture, rules-don't-apply mentality. It's your worthless one-child-only spoiled fuckin' brat mentality that is corrupting the world.

lolmao500's picture

Civil war we can believe in.

In other news, the new ``crop`` of leaders will be chosen this summer with an announcement this october and take power in March 2013.

AnAnonymous's picture

The sooner it will happen, the sooner US citizenism will prevail in China, adding another pool of samples to the expression of the eternal US citizen nature.

pods's picture

Okay, we got it.  You were once promised a call the next day by a "US citizen" that never materialized.  

Get over it already.

LFMayor's picture

I think it's because his biological father squirted him out, then fled the scene.  Abandonment issues et al.  

He needs to break out some vintage Clash and ponder the lyrics:

"Let me tell you about your blood, bamboo kid
It aint Coca-Cola. 

Joe The Plumber's picture

As a US citizen I am flattered that you and millions of other chinese spend your entire day thinking about us. It really is flattering to loom so large in your life

AnAnonymous's picture

There is nowhere to run or to hide from US citizenism. Some like that and embrace it. Others, well, ...

LFMayor's picture

what's that?  Monkey eye father make Big Trouble in Little China?

American Sucker's picture

Sean Corrigan may or may not have anything insightful to say.  But you know what?  He writes so badly it's not worth trying to find his point.

Jake's picture

May have seen a low..but long side is very dangerous.  Look at chart 3


robertocarlos's picture

I heard Obama is having the same two month delay in the election if things don't look good in early October. Who am I kidding, Obama re-election is a lock.

robertocarlos's picture

Oh good grief. I should read the comments before posting. Do we all think the same?

Elwood P Suggins's picture

B O is toast - not the slightest chance he'll be re-elected.

MarsInScorpio's picture

This is a great article that brings to the forefront the reality that the Western perception of Red China is a myth. (Wordplay intended . . .)


The Reds bring to mind the same near-worship experience the West had with Japan 20 or so years ago. Everybody needed to learn Japanese because they would soon take over the world starting with lower Manhattan. It didn't quite turn out that way.


China has hoodwinked the West in the same way - the Drama Queens in the LSM have elevated them to nearly god status. The West stands in awe of their efficiency, their command of the wage slaves (not to mention the actual slaves) they employ, how much better the USA would be if only we emulated them in management and drive, how the future is theirs and nothing can stop them.




Somehow we miss that their growth numbers include cities without people. How much investment capital does that send into a black hole? We ignore the abject poverty of their people, so of course those at the top appear wealthy beyond imagination - mainly because they have swept all the ROIs into their own accounts, and not because the Reds have delivered for the ordinary among them. Red China is not a very happy place to live.


Those brutal realities are harsh enough, but the most glaring error in evaluating the Reds is that they are totally, and completely, dependent on the West for their existence. Without us, they are nothing but shut down factories and a population in revolt.


I've read some who tell us that Red China is developing an internal consumer market. That's funny! How much can their people consume when the literacy rate is barely 80%, the masses live on a couple of dollars a day, Red China is still an overwhelmingly rural nation, the corruption is beyond anything in the West, and for all its appeal to the Ultra-Rich who love the idea of worker ants beneath their boots, it is still a command economy unable to meet the basic needs of their people - despite the rhetoric of Red Chinaphiles and the LSM (in a deja vu of the NY Times and Stalin in the 1930s).


The real Paper Tiger is Red China. Without our consumption, they are dead in the water. Bowing and stooping to them should tell you just how foolish our leaders are - we hold the chips and they are trying to get them from us. We can bargain from a position of strength because they need us much more than we need them.


So watching the Red Chinese repeat the Swan Song of the Japanese will be entertaining. Give it another year or two, with the Second Great Depression stuffing their faux growth numbers right back down their throats, and they will be begging us to bail them out.


Because their economy is a fake, and without our money, it is even worse - it is dead.


Dr. Acula's picture

>Because their economy is a fake


"China’s economic freedom score is 51.2, making its economy the 138th freest in the 2012 Index"

"China’s weak judicial system is highly vulnerable to political influence and corruption...  Various forms of corruption severely affect banking, finance, government procurement, and construction."

Remember, GDP is an absurd way to gauge an economy. Per Ludwig von Mises in Human Action:

"it is nonsensical to reckon national income or national wealth. As soon as we embark upon considerations foreign to the reasoning of a man operating within the pale of a market
society, we are no longer helped by monetary calculation methods. The attempts to determine in money the wealth of a nation or of the whole of mankind are as childish as the mystic efforts to solve the riddles of the universe by worrying about the dimensions of the pyramid of Cheops... But what is the meaning of the items in a statement of a nation’s total wealth? What is the meaning of the computation’s final result? What must be entered into it and what is to be left outside? Is it correct or not to enclose the “value” of the country’s climate and the people’s innate abilities and acquired skill? The businessman can convert his property into money, but a nation cannot."

Vince Clortho's picture

"China’s economic freedom score is 51.2, making its economy the 138th freest in the 2012 Index"

Always cool to crack the top 150.

Joe The Plumber's picture

By the way chinabot (ananonymouse)

You have had two good posts since you have been here. I would like to see more perspective on chinese strategy in this financial game or how the man on the street thinks. You have made ur point hundreds of times about US citizenism. Give it a rest and give us something new

AnAnonymous's picture

I am here to entertain US citizen readers.
US citizens deserve a life of entertainment for the service they have done to humanity.

Two good posts among the ones you read, that is big. That something like a one hundred pc.

Hard to bring anything new on US citizen eternal nature. If it did change that quickly, it would not be that eternal.

But what? Fantasy, propaganda lose their magic, they have to be renewed. Facts, a different story.

TheFourthStooge-ing's picture

AnAnonymous said:

I am here to entertain US citizen readers.

I'm glad that you are so devoted to your responsibilities.

US citizens deserve a life of entertainment for the service they have done to humanity.

I agree. It is admirable that you are able to appreciate everything that has been done for your benefit.

I'll admit that, for the longest time, I thought your negative attitude would never improve. I'm glad to see your newfound positive outlook.


Cosimo de Medici's picture

Did you take your powdered dead baby pill today, little fella?  Is that what you people mean by blobbing, chopping dead babies into pieces then drying them on the stove before turning them into powder?  Remember, though, it's One Powdered Dead Baby per family.  Official policy.

One truly has to love the Chinese citizenism entrepreneur.  Who would have thought Powdered Dead Babies were the next big thing and part of the Chinese Export Miracle?


TSA gropee's picture

Been in Wujiang for 5 of the last 6 weeks with 5 days to go and is my 11th trip in 3 years.

The Chinese culture is FUBAR, their arrogance is only eclipsed by the magnitude of their indifference to their fellow man. All one needs to see is the video of those two shitheads that run over and all the other POS's that walk by the still writhing body of two year old Yue Yue.





riphowardkatz's picture

Not what Munger says according to him China is the bomb, if only the US could have more central planning and totally awesome 5 year plans.

azzhatter's picture

I'm pretty sure Munger died 6 years ago, that's just a wheezing robot that Squicky plays with

Bastiat009's picture

Are they the same Chinese that are buying gold?

Shizzmoney's picture

That picture of the fight with Georgetown is :solidgold

Bet those dudes who *think* that they were hard just b/c they caem from the hood were surpised when it was Chinese dudes came harder than them!

TSA gropee's picture

I've posted this before but I'll do it again for that a hole anon.

Been coming to China since 92, currently in a rural community outside of Shanghai about 1.5 hrs. 5 of the last 6 weeks spent here with 5 days left.

The Chinese people will continue to denigrate into a society of spoiled rotten, arrogant and inconsiderate pricks. This is due IMHO, to their implementation of the one child only policy in 81'. Now, fast forward to 2012 and you now have 30 year olds starting to enter positions of leadership and power as the product of an only child family. Ever see a well behaved Chinese kid? Yeah, neither have I, they get what they want, when they want, throw hissy fits, and there is next to no discipline.

Think they're belligerent now? Wait until they make their way up.

Marginal Call's picture

I don't know if I'd blame it on the one child policy.  Chinese society is like a fucking ant hill without the cooperation, they just climb all over each other to get on about what they're doing.  There's a costco in Seattle that is close to the international district that is full of Ornamentals.  80 year old grandmas that will run you over with their shopping carts, and god forbid you get in between a tray of deli-mex taquito free samples and them.