Chinese economic collapse, 'Dubai times 1,000'

China's treasury reserves stands at est 1 over Trillion dollars. Divide that amount with its est1.3 billion people, it will only mean $1000 per China citizen if it was given back. At $1000 per person, you can't fund healthcare, let alone even Education for a citizen's lifetime!

So do not presume they are rich. They are not. They are only a dictatorship, where no citizens dares argue with the public security officers, let alone talk to their region's party chiefs.

NWO/Corporations love the commies because the commies could do anything they wish to the people, even make them accept slave wages that Corporations drool over. Scratching each other backs and needing each other, they produce dubious and dangerous goods to the rest of the world, making China the factory of the world.

The commie bigwigs are sweating big time with the falling dollar and their citizens getting smarter by the day, realizing wealth had been unfairly distributed and social spending close to nil. It is only a matter of time the peasants will rise against their rich, who like the rich everywhere else, had hoarded their wealth instead of spending it.

For simple example, if a CEO sells a can of exclusive righted coke to EVERY China citizen daily, he will earn $1.3 billion dollars daily. Even after deductibles, he will be making $100million daily. Thats $36 billion into his pocket annually. Does a man needs that much obscene money?

Had he ever thought of making it cheaper for the masses or paying such excesses to the slave workers who helped him? Nope. None at all. He and the Corporations want more, dooming mankind further, without realizing that if he hoards this money, no one, not even the slave worker let alone the world will have the money to buy anything. Where will the $$$ come from when all that money is valued upon is hoarded up?

Accelerating this uprising will be the rest of the world, whom had been impoverished when the Corporations/Investors fled with their money into China. With no jobs, the common international masses have no money to make purchases, and worse still is the quality of China goods which do not last, no one is buying it enough to sustain the running of factories in China.

This is the comming one large mess big time.

Protectionism and technology was the way to progress for mankind, with other developing nations following behind, solving their social and political issues first and then catching up, perhaps always one step behind the leaders. It may seem a bad way but our eventual destiny is to occupy the stars anyway, and develope further our tech and mankind.

But instead, thru the greed of NWO/Corporations using the deceiving ideology call Globalisation, a mess had been created.

However, its not the end of the world. Developed countries will have to restart and protect their economies, China needs its uprising so that the common masses will be slaves no more, everyone earning a decent wage based on merit and productivity, circulating money for trade, and eventually, mankind will overcome this setback and reach the stars one day soon.


[edit on 12-1-2010 by SeekerofTruth101]

Few of you seem to know much about the country China beyond the hoopla in the media. Very smart people who I'm personally sympathetic to. But after you go beyond the coastal cities Beijing, Shanghai, Hong Kong, you have a billion people living a quality of life about the level of the Dark Ages in Europe. To keep them form withdrawing and even rebelling it is necessary to pour vast amounts to maintain them. Everything from food growing to road building is heavily subsidized by the central government. This is where the Chines pofits are siphoned off to.

But the short bubble of producing good for the Western World burst a year ago. Tens maybe hundreds of millions are returning to their subsistence farms in the country after years in unhealthy sweatshops working 12 hours a day for pennies. China is in a bust cycle.

A good analysis from STRATFOR who advise corporations and nations on what is happening in the rest of the world:

www.stratfor.com...

Beijing’s age-old problem has been trying to keep China in one piece. Beijing has to underwrite massive (and expensive) development programs to stitch the country together with a common infrastructure, the most visible of which is the Grand Canal that links the Yellow and Yangtze rivers. The cost of such linkages instantly guarantees that while China may have a shot at being unified, it will always be capital-poor.

Beijing also has to provide its autonomy-minded regions with an economic incentive to remain part of Greater China, and “simple” infrastructure will not cut it. Modern China has turned to a state-centered finance model for this. Under the model, all of the scarce capital that is available is funneled to the state, which divvies it out via a handful of large state banks. These state banks then grant loans to various firms and local governments at below the cost of raising the capital. This provides a powerful economic stimulus that achieves maximum employment and growth — think of what you could do with a near-endless supply of loans at below 0 percent interest — but comes at the cost of encouraging projects that are loss-making, as no one is ever called to account for failures. (They can just get a new loan.)

The resultant growth is rapid, but it is also unsustainable. It is no wonder, then, that the central government has chosen to keep its $2 trillion of currency reserves in dollar-based assets; the rate of return is greater, the value holds over a long period, and Beijing doesn’t have to worry about the United States seceding.

Because the domestic market is considerably limited by the poor-capital nature of the country, most producers choose to tap export markets to generate income. In times of plenty this works fairly well, but when Chinese goods are not needed, the entire Chinese system can seize up. Lack of exports reduces capital availability, which constrains loan availability. This in turn not only damages the ability of firms to employ China’s legions of citizens, but it also removes the primary reason the disparate Chinese regions pay homage to Beijing.

China’s geography hardwires in a series of economic challenges that weaken the coherence of the state and make China dependent upon uninterrupted access to foreign markets to maintain state unity. As a result, China has not been a unified entity for the vast majority of its history, but instead a cauldron of competing regions that cleave along many different fault lines: coastal versus interior, Han versus minority, north versus south.

China’s survival technique for the current recession is simple. Because exports, which account for roughly half of China’s economic activity, have sunk by half, Beijing is throwing the equivalent of the financial kitchen sink at the problem. China has force-fed more loans through the banks in the first four months of 2009 than it did in the entirety of 2008.

The long-term result could well bury China beneath a mountain of bad loans — a similar strategy resulted in Japan’s 1991 crash, from which Tokyo has yet to recover. But for now it is holding the country together. The bottom line remains, however: China’s recovery is completely dependent upon external demand for its production, and the most it can do on its own is tread water.

reply to post by SeekerofTruth101

The commie bigwigs are sweating big time with the falling dollar and their citizens getting smarter by the day, realizing wealth had been unfairly distributed and social spending close to nil. It is only a matter of time the peasants will rise against their rich, who like the rich everywhere else, had hoarded their wealth instead of spending it.

The Chicoms are doing a balancing act between the more populous interior, mostly agricultural people who are very low income and isolated vs. the coastal people involved in the Chinese industrial revolution. The interior population are the base drawn upon for industrial workers as needed. But they are very unsatisfied and could revolt and cause big troubles. The workers in the coastal cities are happy as long as the economy is going well.

Mao, for example, came to power by inciting the agricultural interior peasants to revolt against the coastal cities.

China has very large potential domestic problems to deal with along with all the rest!

reply to post by mmiichael


Great post! I have a lot of respect for Stratfor and George Friedman its founder.

Great summary:

China’s survival technique for the current recession is simple. Because exports, which account for roughly half of China’s economic activity, have sunk by half, Beijing is throwing the equivalent of the financial kitchen sink at the problem. China has force-fed more loans through the banks in the first four months of 2009 than it did in the entirety of 2008. The long-term result could well bury China beneath a mountain of bad loans — a similar strategy resulted in Japan’s 1991 crash, from which Tokyo has yet to recover. But for now it is holding the country together. The bottom line remains, however: China’s recovery is completely dependent upon external demand for its production, and the most it can do on its own is tread water.

Friedman said "China is Japan on steroids". China is not Japan but considering all of China's problems there is a downturn in the future here somewhere. For Japan it was the mid 90's. When will it be for China?

Originally posted by plumranch
Friedman said "China is Japan on steroids". China is not Japan but considering all of China's problems there is a downturn in the future here somewhere. For Japan it was the mid 90's. When will it be for China?

Friedman is the best long term analyst there is. He has noted China seems to be on the rise every fifty years. But collapses again under it's own weight. Too many people, not enough to feed them. All the new wealth should have been ploughed back into their own economy. Not to buy US bonds.

The Chinese expected the proxy manufacturing thing to keep growing and growing. It peaked a year and a half ago. Time to diversify with new product.

India is actually moving closer to becoming what people like to think China is.

reply to post by kozmo


Unfortunately it will not mater what ether the US or China do. “The fix is in”. No economy can run this hot for this long with out a crash. Remember the roaring 20’s right before the depression in the 30’s? History has a way of repeating it self, especially when no one takes the time to remember it.

I’m no expert or psychic, but the people I Know and trust are all saying it could get real bad this year. It never hurts to prepare for the worst but still hope for the best.
God bless

reply to post by mmiichael


China is in a unique position of overstimulation, lagging world markets and world market competition! My guess that China's salvation is that it has a lot of accumulated capital that can be used against its current unprofitable situation. China is using that capital to bolster it industry and lend to the US rather than strengthen it very extensive rural infrastructure.

China’s current problem is that, with the exception of having more infrastructure than it did a year ago, Beijing enters 2010 in almost the same situation as it entered 2009. Exports have rebounded by about one-third but have not returned to pre-crisis levels. Chinese corporations remain burdened with the same export-dependency and capital-inefficiency problems that made 2009 so nerve-wracking, and structural shifts in the Chinese economy to reduce this dependency cannot be made in a decade, much less a year. The Chinese, then, have little choice but to continue the debt-driven loan and infrastructure programs that allowed them to evade a crash in 2009 until such time that external demand revives sufficiently.

Originally posted by plumranch

China is in a unique position of overstimulation, lagging world markets and world market competition! My guess that China's salvation is that it has a lot of accumulated capital that can be used against its current unprofitable situation. China is using that capital to bolster it industry and lend to the US rather than strengthen it very extensive rural infrastructure.

China's exports seemed to have rebounded in the past few months but it is only relative. Inventories and excess production clogged warehouses and the entire system on all ends into 2009. Goods were sold off often a below cost just to move old product out. So now a new equilibrium is being reached with the supply and demand situation being more aligned.

But the glory days of overproduction, overstocking, over speculating, based on projections of increased growth and increased demand are over.

A muffled crash in China. Bad is the nouveau riche money will not be recycled into the original source. It has left China. Bad planning on the part of Beijing not ploughing every cent back into their own economy.

Many factors and this may just be a setback for China. Alternately we'll all be saying in a decade or two "Remember when China seemed like it was going somewhere."

They may be wonderful hard-working people, but the Chinese never really understood capitalism and expanding wealth. It takes more than a degree from London School of Economics. It's a way of thinking.

I hope they figure it out.


M

reply to post by mmiichael


Chinese businessmen and stimulus loan recipients are plowing the money back into housing real estate creating a bubble!

China sees fastest housing price rise in 18 months

China's property prices rose at the fastest pace in 18 months in December, ending the year with rising fears of bubbles in the property market. Housing prices in China's 70 large and medium-sized cities rose 7.8 percent in December 2009 from a year earlier, and were up 1.5 percent compared to the previous month, said the National Bureau of Statistics (NBS) on Thursday.