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A Glimpse Of What Is Really Happening In China

Tyler Durden's picture




 

Earlier today, the Chinese Internet (yes, it is its own category) experienced a glitch in the matrix. Whether this is due to further potential confusion over the fate of Bo Xilai (and/or any rumors of a concurrent/past/future military coup), or just overall confusion as to what is actually happening in the country, or simply mere censorship gone uber-wild is unclear. As the WSJ explains it, "At around 11 a.m. local time Thursday, China’s Internet suddenly began behaving very strangely. People inside China reported being unable to access some Chinese web sites like Sina’s Corp’s portals as well as popular foreign web sites not normally blocked by China’s firewall. Simultaneously, Internet users outside China, including in Hong Kong, reported difficulties accessing key Chinese sites, like search engine Baidu and the website of the People’s Bank of China." And while we have no idea of what is going on behind the scenes, we are fairly confident what isn't. Such as the country growing at a 9% as has been wildly speculated all day in what some suggest is a leak of Chinese official data. For a glimpse of what is going on, we went to get some local color such as this message board posting at CND.org. Is this the full story? Of course not. But neither are the endless lies peddled by the PBOC and the CCP. Our advice: keep the below in mind while reading any economic data coming out of the country Ministry of Truth and Bureau of Propaganda in the coming weeks and months. Because if today's Internet glitch is any indication, things behind the scenes are truly starting to heat up.

Google translated from CND.org (original link)

Bo Xilai event uproar obscures the attention of people more serious underlying crisis. Continental Bureau of Statistics released the latest economic data 1,2 show that the economy has begun to negative growth in the profits of industrial enterprises in China fell sharply, the real estate bubble has burst, and a sharp rise in banks' bad chain. Of course, this is Communist China two decades despite all spoiled countries attempt to delay the inevitable results of it perish fate. Finally broke out of these evil consequences.

 

Serious inflation triggered a sharp rise in labor costs. As a major processing plants in China, from the beginning to put the operating profit too absurd. Government export subsidies makes the price of many products is equal to or even below cost. Serious inflation, the basic cost of living is greatly improved today, the CCP is extremely irresponsible to administrative means to burden enterprises. This will inevitably lead to a large number of business failures and unemployment soared.

 

The real estate bubble burst is continuing, when the panic crash, who also can not predict. But the fairy tale of the real estate prices sky-high price, the vacancy rate as people stunned and appalling rough housing,

 

China's real estate crash is the inevitable result of leading to the collapse of the Chinese economy.

 

Chinese people are not stupid. Madness out the transfer of assets in addition to the corrupt officials, in recent years made their fortunes in the size of the rich and a large part of the property firmly Dangdang arrived to a foreign land. If you analyze the many companies the company's financial will find they are barely sufficient funds in operation, because the bosses an excess money quickly take away. It also can not blame them, we all know this is a land of block no tomorrow. Therefore, when the collapse of the Chinese economy, you understood why banks are empty shells at the same time, but also a loss for words to face the many deserted the once mighty booming company.

 

Of course, the Chinese Communist upper struggle for power will be in this last scene was very impressive and ugly bestiality on its head. Finally, you will find that they are not only some of the hypocrites, bandits, wolves, is an absolute coward.

 

Like many of the dictatorship, as the collapse of the CCP's very likely as volcanic eruptions, sudden and violent. Many hands were stained with the blood of people of corrupt officials is certainly as much as possible to flee his country, I thought it was for them, the Chinese at home and abroad should be concerted action, urged the international community treatment to war criminals, not only confiscated all of them with their associated property, and be tried and brought to justice. This is not only for the Chinese people are cruel persecution torture a proper explanation, but also a warning to all present and future of brutal rulers.

And this is what the Ministry of Truth is censoring in the past month, accrdoing to China Digital Times

 

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Thu, 04/12/2012 - 16:59 | 2339388 Jake88
Jake88's picture

what the hell is that? Chinese English?

Thu, 04/12/2012 - 17:20 | 2339463 humblepie
humblepie's picture

I went to the CND.org site and read the original article in Chinese. The piece was a comment submitted by a reader on 12.04.11.  I'm not certain how reliable the source for his/her accusations were, but I'm certain the grievance was authentic. I lived in Shanghai for three years. It was a real experience. They have regular citizens working for the police to spy on other citizens. I believe the ratio is almost 1:5.  While I was there, I got a knock on my door at 8:30 one night from the local 'police' responsible for residential records, just to make sure I'm who I'm supposed to be. I was speechless, but tried to be courteous. No one can make a move in Shanghai without the police knowing, hence to the regular citizen, Shanghai is the safest city in all of China. I got out of there as soon as I could. Scared the living daylights out of me.

Thu, 04/12/2012 - 18:00 | 2339607 bankonzhongguo
bankonzhongguo's picture

I would suggest that it is in the best interest of many Chinese elites for a "hard landing."

The fact that Chongqing nuevo riche's man got the ax is a primer for taking a scythe to the Shanghai faction.

The Army is the only glue that keeps the country under one flag.  They and the PAP will use any macro economic problem, local riot, food crisis or flood as a reason to consolidate power.

Not all that different than the Second American Civil War shaping up between the disenfranchised, unemployed, shell-shocked, "Don't Tread on Me," prozac veterans of 10+ years of constant war verses Obama's DHS federal police random check point new black panther party "civilian army."

Meanwhile the CFR crowd keep fantasizing about breaking China in two (or more).

I guess that is one reason to default.

 

Thu, 04/12/2012 - 19:08 | 2339826 deflator
deflator's picture

 I gotta go with my gut on this one... I think China's relationship with the U.S. and maintaining the status quo means that American citizens will experience a wave of inflation in Chinese made goods. Have you noticed the prices at HD and LOW lately? 10,000 baby boomers retiring every day for the next 19 years? Huh?

Thu, 04/12/2012 - 19:41 | 2339924 CTG_Sweden
CTG_Sweden's picture

One thing I don´t understand is why China exports sneakers in order to be able to pay for imported oil when they could have improved their balance of trade by – for instance – building their own commercial aircraft.

 

I know that they have begun building commercial aircraft recently. But I reckon that they have had that capacity for about 15 years by now. It should have been possible for them to become net exporters of commercial aircraft by now. For a big country with a large domestic market it is easy to get the economies of scale needed for commercial aircraft.

 

I assume that both the US and the EU would prefer to export aircraft and import sneakers. So they would probably not like if China would build more commercial aircraft. On the other hand politicians in Europe and North America don´t really care whether their electorate produce sneakers and aircraft as long as their defence has got superior equipment. Swedish politicians – unlike American politicians – don´t even care about that. You don´t infuriate European and American politicians by making their electorate poorer. They don´t care. Therefore, I think that Chinese leaders are stupid if they let their people work for starvation wages making sneakers (rather than aircraft) which increases the risk for riots due to a low living standard.

Thu, 04/12/2012 - 21:12 | 2340136 deflator
deflator's picture

 There are many inconsistencies in your thought process beginning with aircraft manufacturing. You see aircraft are merely assembled in the U.S. and EU. Most of the components, where the meat and bones of manufacturing jobs are is outside of the U.S. and EU. What seems to be important at the moment is the financialization of everything is in the U.S. and EU.

Fri, 04/13/2012 - 14:22 | 2342380 CTG_Sweden
CTG_Sweden's picture

 

Deflator:

 

“There are many inconsistencies in your thought process beginning with aircraft manufacturing. You see aircraft are merely assembled in the U.S. and EU. Most of the components, where the meat and bones of manufacturing jobs are is outside of the U.S. and EU. [- - -]”

 

 

 

I think that you are exaggerating.

 

I know that Boeing has outsourced manufacturing of some parts of their aircraft to Japan, that Rolls-Royce has built an assembly plant in Singapore, that Airbus has outsourced wing work to South Korea and that Saab in Sweden makes ailerons for some Airbus model. But Sweden is a nowadays a member of the EU.

 

The combined population of the EU, North America and Brazil is smaller compared to the Chinese population. Perhaps the Chinese domestic market is not quite as big as the combined figure for the countries/free trade zones mentioned above. Or perhaps it is. In any case I reckon that domestic Chinese economies of scale would be great. Why not build an aircraft plant in Shanghai and outsource manufacturing of rudders to a company in the Sichuan province and the rudders to a company in the Jilin province?

 

I also suspect that it would be easier for China to replace shoe manufacturing with aircraft manufacturing if they would make their own aircraft instead of trying to become suppliers to Boeing and Airbus. In any case I think that it will take less time to increase production of aircraft components and reduce production of shoes if they build their own aircraft. Today China pays for oil and raw material by exporting sneakers to Europe and the US. Why not get a better balance of trade by importing less aircraft and export aircraft to countries that now sell oil, iron ore and bauxite to China? I don´t think that European and American politicians would care if that perhaps would make their electorate somewhat poorer. They may change their mind if lobbyists and the big media think that it is important to export capital-intensive goods and import labour-intensive goods. Currently, they don´t think so since labour-intensive industries can absorb a larger workforce. So far, they have thought that it is more important to have an economy that can absorb as much additional labour as possible than to have an economy that is as capital intensive as possible. I don´t know if they eventually will reach a point when they think that the composition of the electorate is good enough and that excessive supply of labour therefore is not necessary any longer. But until they reach that point I suspect that they don´t care very much China increases its share of capital intensive industries at the expensive of Europe and America, especially if we are talking about China´s domestic market. Therefore, I suspect that the smartest move China can make is to increase its share of capital-intensive industries as fast as possible.

 

Thu, 04/12/2012 - 23:08 | 2340496 JustACitizen
JustACitizen's picture

Wouldn't it be a delicious piece of irony if suddenly we (Americans) could not afford the Chinese "crap" because of the collapse of the US dollar?

If the Euro were to also collapse - then they would have a substantial decrease in buying power too.

I wonder who the Chinese would sell to - and on what terms?

It would certainly give new meaning to the word "bubble"...what if we manufactured billions and billions of goods - but nobody could afford them. Epic.

I'll bet it would be painful for all of us.

The NWO might just collapse...

<mind wandering>

Fri, 04/13/2012 - 02:37 | 2340852 the tower
the tower's picture

This is exactly where we are heading to.

Production back at home, no more handouts, same wages as China has now.

There will be 100% employment again, and dancing with the stars, and ultra cheap fast food, and seriously, isn't this better for the sheeple?

The NWO looks great from the inside.

Fri, 04/13/2012 - 03:09 | 2340872 laomei
laomei's picture

There's a HUGE disconnect between reported and actual GDP to be entirely honest.  Except it doesn't go in the way you assume that it does.  The amount of business that goes unreported is obscene if you know anything about this place.

 

Basically it goes like this:

If you are buying something and want a fapiao, it'll end up getting reported somewhere.

If you are buying something and dont want a fapiao, you typically get a discount and it'll never be reported.

 

We also have a plague of fake fapiaos and shell companies offshore to hide revenue.  Reported salary information is rarely accurate, as total compensation is typically far higher.  Foreign companies don't get any slack, but foreign companies don't even come close to being in the majority here.

 

Non-reporting has always been an issue, but there are surges of it that come and go with the times.  This past quarter, it's been a lot more rampant than usual.  And as always, cash is king in China.  Good luck getting accurate cash reporting, much less payments that get diverted offshore.  The underground economy has been surging here.

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