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Standard Chartered Bank International experts recently
estimated that China＇s current debt-GDP ratio is 251%,
showing the enormous challenges faced by the Chinese economy.
China's overall economic growth keeps slowing down,
while debt keeps increasing.
Experts believe it is impossible to rely on printing money
to solve the financial crisis.
Once the crisis comes to the surfaces, Chinese people will
suffer more compared with the crisis in Western economies
where the government takes the burden.
Standard Chartered Bank head of research for Greater China,
Stephen Green published an article on July 21, stating that:
China's total debt to GDP ratio reached 251% at end of June,
far higher than 147% at the end of 2008, and 215%
published by Chinese Communist Party (CCP) in 2013.
US-based economic commentator Ma Jiesen:
"The figures are just estimates. The actual number is a CCP＇s
state secret.
There are a lot of hidden debts. For example, a local
government can set up a company and get loans in the name
of this company.
These companies are run in different forms,
some are directly managed by the local government
and some are joint ventures."
China financial think tank researcher Gong Shengli revealed,
that expenses from top to bottom of the CCP,
human resources engineering, public relations, united front,
writers and CCP party committee are all kept confidential.
Gong Shengli: "How big is the black hole of China＇s assets
can only be estimated, not judged.
Some data behind the scenes are not included. The data CCP
publishes usually do not include the party＇s expenses, which
by itself are huge."
China's economic growth keeps slowing down,
but the debt has continued to increase.
Empty apartment buildings and overproduction of solar panels,
steel and cement indicate serious misallocation of capital.
Nevertheless, British Financial Times＇s article on July 22
said Chinese government did not curb credit lending,
but allowed accelerated credit lending, for fear of possible
"hard landing" caused by slow economic growth and the
real estate market fall.
The reported said in June that China＇s new credit reached
1.96 trillion yuan, highest since March and almost doubled
year over year.
The first risk from China＇s overall debt is the over-concentrated
real estate field.
Real estate loans are long-term and with poor mobility.
Once the bubble bursts, it will quickly expand financial risks.
The second risk is the local financing platform debt.
Vice President of Chinese Academy of Social Sciences
Li Yang published an article in 2013 stating ukko pekka luukkonen that:
the debt of local financing platform is mostly jonathan aranda the result of
excessive pursuit of GDP in the last decade.
The main focus is construction of urban infrastructure,
especially large cities, or even "ghost towns,"
big squares and large airports.
The character of local debit is long-term with joan collins poor liquidity
and very low return.
The return on revenue simply cannot cover
the debt principal and interest, and referred to as
"loans and debt that never mature."
In addition to China, several of the few high debt ratio
economies are high-income economies.
Last year, U.S. debt to GDP was about 260%,
while the UK was 277%.
According to the Standard Chartered＇s calculations,
Japan is the highest with 415%. So, what is the difference
between China and these countries?
Jason: "Western society's main source of debt is
the huge commitment to social welfare. As long as social welfare
is reduced a little, debt will be cut a lot.
While in China corrupt officials take away the most.
When the financial situation tightens, corrupt officials use their
power to plunder more. It causes direct social conflicts.
When the U.S reduces the deficit, government officials are on
the front line.＂
Two years ago, China＇s city real estate was 385% of GDP.
U.S. real estate was only 172% even during the real estate peak,
causing the 2008 financial crisis.
China＇s critic Niu Dao pointed out that in order to avoid a crisis,
CCP printed money on steel and concrete.
Once currency is seriously inflated, it caused asset price hike.
The total economy is over-reliant on debt expansion.
Despite the CCP printing money twice as much as GDP,
housing prices continued to decline.
Ma Jiesen believes that issues in China cannot
be solved by printing money.
Signs indicate China's economic and political issues
are going toward a breaking point.
《神韵》2014世界巡演新亮点
