China is slowing down (again) a lot faster than anyone expected
What do you mean "anyone?" Readers of maddogslair.com have long realized that China is "slowing" and fast, and what appeared to be growth in the past was mostly a Ponzi scheme of kited debt, and valueless construction of ghost cities, roads to nowhere, and other rubbish.
Welcome to the party Business Insider . . . YOU'RE LATE!
China Warns Economists, Analysts, Reporters About “Overly bearish” Remarks | MishTalk
They would hate for the truth to find its way out!
Go read the whole thing. The Chinese economy is little more than a massive structure of lies attempting to confuse the world into believing something that is not.
The Chinese economy will have its come-to-Jesus moment, and it will likely be spectacular. Well, unless you are one of the CCP. Then it might come at the end of a rope tied off to a lamppost. Or maybe the parties luck will hold. We need Chinese economy a dead pool!
China’s debt reckoning cannot be deferred indefinitely - FT.com
. . . instead it is simple inflating an already inflated, and fraudulent economy.
"Timing the end of a credit boom is more luck than judgment. There is no question that lenders own bad loans, reckoned unofficially by some banks and credit rating agencies to amount to about 20 per cent of total assets, the equivalent of around 60 per cent of GDP. These will have to be written off or restructured, and the costs allocated to the state, banks, companies or households. Yet in a state-run banking system, where loans can be extended and there are institutional obstacles to realising bad debts, the day of reckoning can be postponed for some time.
More likely, the other side of the lenders’ balance sheets, or their liabilities, is where the limits to the credit cycle will appear sooner. Loans have to be funded by deposits, and China’s banks are venturing beyond fairly stable household deposits to more volatile funding sources in the shadow finance, interbank and corporate markets and overseas. Growing dependence on these liabilities renders the banking system, and the economy as a whole, more vulnerable to withdrawals that are prone to happen suddenly or when lenders lose confidence in economic and financial stability, as we know from 2008."
This is an incredibly precarious position to be in for China. Add to this the fact that China is seeing a massive bums rush expatriation of money. This has driven home prices in Vancouver, and many parts of the West Coast into the stratosphere. China has been very lucky up to this point. However, what it was doing was fairly simple, in that it was adopting the earlier model that the West used to become wealthy. However, that model will only take China so far, and the next step requires the Chinese to innovate, and there is no evidence they can do so.
"For the foreseeable future, China’s neglect of the problem of excessive debt growth looks likely to continue. Beijing cannot afford to spark a disruptive end to the credit boom and a slump in investment, with anecdotal signs of rising labour unrest and unemployment — especially before next year’s 19th party congress, where President Xi Jinping plans to consolidate his support at the upper levels of the Communist party.
The question, then, is whether the politics of debt control will shift after the congress. With a slowing economy and rising financial instability risks, it is hard to imagine Beijing making a strong commitment to cut credit dependency and impose debt management policies such as more defaults and write-offs, the sale of national assets, and the transfer of wealth from indebted state companies and local authorities to private sector households and creditors.
Yet, without such a shift, China is likely to experience greater financial turbulence than it has seen recently, which may not happen by the end of this year but will not take three years either. The main outcome would probably be a growth hiatus of unknown duration, for which the rest of us need to be prepared."
The when question is unknowable, the next question is how severe.
Take essential precautions, and make sure that if China has a rough landing you are nominally protected. I am assuming that once it goes it will be a doozy!
China Howls but Dalai Lama Draws Crowd at Human Rights Talk
. . . no, not the Dalai Lama, silly, China!
China today has some residual power driven by its status as the worlds largest manufacture of plastic trinkets, and iPhones. But not much as it is beginning the collapse of its myriad Ponzi Bubbles.
IMF issues warning on global growth as China exports plunge - FT.com
The IMF is correct to worry about China, but wrong to think that a little consumerism can right the economic ship of China. China is a massive debt Ponzi, construction Ponzi, Ghost cities Ponzi, infrastructure Ponzi, bank Ponzi, to name but the larger few.
China cuts growth forecast - FT.com
This is mostly blather, and bluster. It is impossible to trust these numbers, and from what I have seen, the backing internals do not support GDP growth of 6.5% and may not support GDP growth of even 3%. Nor do I see any of this changing over the next many years. I have no crystal ball, but the world has achieved peak Socialism in Japan, Europe, China, Russia, and much of Eastern Europe. The results of this are demographic decline, an aging population, business stagnation, and economic stagnation. The feckless, dithering politicians who cannot take the steps necessary to shift from the dying Socialist/progressive economic model to a new functional economic model, will not be savior in this scenario. I suspect this ends with the following cue card,"And a hard landing was had by all!" Huzzah! Huzzah! Huzzah!
The Dalai Lama only needs to wait out the rapidly weakening China to win this one. What that win will look like is anyones guess, but let's hope, and pray for something less "interesting" than a full on revolution in China. Perhaps China could learn from the late 20th Century Russian revolution, and make it relatively uneventful? Yeah, I think that's mostly wishful thinking too, but I am sticking to that wish, since it would mean fewer casualties.
Perhaps the CCP survives these rough seas, Perhaps not. Regardless, nothing will be the same for the CCP and its leaders. Once the China Colossus feet are revealed as made of clay, it will never be viewed the same. And once it cracks, and the little mouse inside wanders out, it will return to its appropriate place in world events.
Money Bomb Coming
All because the Chinese economy is collapsing.
China's Economy Collapses with Exports
Mish nails it, the IMF foolishly believes the solution to decades of excessive debt is consumer activity, when the solution is restrained monetary policy, and fiscally responsible government.
I am not holding my breath.