The Chinese economy: in much worse shape than most believe?

This subject came up on an Iran oil embargo thread which was basically off-topic.

I believe it deserves discussion.

First, I'm no economic expert, as my chosen name implies. Certain posts/threads have suggested, for example, a Chinese attempt to control/own the world's gold supply (among others) has, in fact, a different explanation.

As the disposable income decreases worldwide, a manufacturing base that services that market will also suffer.

There are those in the investment field who believe that the Chinese moves to invest outside China (mainly in mining, oil and gold) is actually individual corporate owners bailing from their currency and potential nationalization by the gov't in a desperate attempt to stay solvent. That the gov't, as well, is "diversifying" outside China not in an attempt to "control" but to survive.

Iran may be selling oil to China and being paid in yuans, but that may be an act of desperation by the Iranians.

My information is from a family friend who has had an investment newsletter for many, many years. I will provide a link for those that might be interested to a recent, weekly issue of that newsletter. The Chinese reference is on page 21.

I'm not an "investor" or wealthy. My interest is having an overview of where we are going, economically, and being somewhat prepared for what now looks inevitable. The only question left is the timing of it all.

Timing is the investment issue while my own purpose is preparedness to some degree regardless of "timing".

Many of the newsletter publishers have a Quid Pro Quo with each other. They send their letters for free to each other, often quoting each other with their own comments and opinions added on after that quote.

This allows each author to stay on top of issues that they don't specialize in so as to give the broadest and most complete picture to their subscribers.

It is my understanding that the top newsletter charges an annual fee of 100,000 U.S. for twelve monthly issues. It has over 20,000 subscribers.

It is safe to say that no one person has all the data that is available worldwide and newsletters are probably the major, single source of information for the heavy-weight investors.

It surely isn't Fox, MSNBC and the rest.

Here's the link, if your interested, use it or ignore it as you choose:
www.tradertracks.com...

The Chinese economy is not as rosy as they would like the world to believe. Most of the growth was due to the housing market yet there are far to many homes and office buildings available than there are those that can afford the asking price. Even when faced with total loss of investment, the contractors will not sell at a lower price in order to prevent a total loss.

60% of the domestic container carriers are going out of business which China blames unfair pricing but the major carriers. They fail to blame the fact that they went on a building frenzy of cheap ships and easy loans which has glutted the market. The owners of the domestic lines bought new ships and added to their fleet instead of replacing the older vessels and only to the point of sustainability. Even with government funding for their major lines, they are faced with the fact that competition is tough in a shrinking economy.

With exports down you cannot shore up the economy by building homes that no one is buying and call it growth. It's like the US printing money to the tune of $85 billion a month and saying things are getting better while the job market and business go south. This leaves China only one option and that is, secure as much recourses as possible in other countries. This is seen in their bid to purchase foreign companies in the mining and oil sectors.

China must sustain an 8% growth just to stay afloat. However, currently they are below that which for China is negative numbers. Inflation is also not indexed properly for the publics view yet with as much as a 50% increase in food prices over the past year says it all. No matter how you cook the books, China is in a worse position currently that the US was in 2008. Beijing is doing everything they can to soften the coming crash.

reply to post by nwtrucker


Thanks; I'm reading the entire thing now. My bafflement by large-scale economic principles is no secret. But I still like to read about such things when they're laid out in terms I can understand. Not that the lessons stick--but I do understand well enough that it's all being manipulated to the definite advantage of those who profit no matter what happens.

And that we've been robbed and now brutally assaulted on top of it....

I too beleive that China has issues on the horizon!!

A house boom thats only supported by 5% or less of the population is a huge bubble waiting to burst!

Only 5% or less of the population has any domestic spending power so the maths dont add up to genuine growth!!

China's infrastructure spending has been enormous over recent years and that has to be paid for with revbenue and taxes etc!

Investments offshore are possibly an insuance policy because economic disaster is a possibility.

ROW spending is down and looks like it will continue.

It will be interesting to see how things play out!

I see your points.

Toss in massive aerospace development, nuclear arms, high tech military aircraft development and far more expensive, the infrastructure needed for those projects to have any success at all, just to compete with the West and it's like the kids were let loose in the candy store!

Increased competition from India, et al, toss in no oil reserves to speak of and now drought...

Maybe the whole thing collapses into itself, back to regional warlords and dictators.LOL.

Not a pretty picture.

The idea of this century belonging to China is looking more and more like a huge joke.

They do have an old curse that goes "may you live in interesting times". True for all of us, perhaps even more so for them.

reply to post by Ex_CT2


Good luck trying to sort all that information out. I sure can't.

Again, I use it for an overview. The world media seems to paint a picture that only reveals some of the problems.

Can't have the consumers too pessimistic else sales will drop even more.