Posted on 11/11/2012 9:24:15 PM PST by bruinbirdman
In 2011 Chinese investors evaded government regulations to move $602.9 billion out of country and the outflow is increasing. Last year’s outflow was part of a $3.8 trillion flood of capital that left China over the last 11 years, rising from $172.6 billion in 2000. Public frustration with a banking system that subsidizes state companies at the expense of savers, as well as profiteering from loopholes in China’s pervasive economic controls, are the primary causes of the outflows. It is unclear how much money came from crime or corruption but by aiding tax evasion the illicit outflow could widen China’s wealth gap and exacerbate existing social, economic and political tensions.
Leaders at China’s State Council have asked policy think-tanks in Beijing to draw up ambitious economic reform proposals to curb powerful state firms and give more freedom to float the yuan and interest rates. Reuters interviewed policy advisers involved in writing the reform proposals who said the goal was to contain the government’s meddling in the economy and clip the wings of more than 100,000 state-owned enterprises (SOEs), which enjoy privileges including preferential access to bank lending and government contracts. Other reforms include allowing markets to set the cost of bank credit, land and various natural resources. Credit is currently allocated by the government, which tells state-backed banks how much to lend and when. All land and resources are owned by the state, with private ownership limited to temporary lease rights.
sounds like our gov under mobama
Some of this is actually coming here to buy California real estate. California actually had a smaller bubble than the top Chinese cities, so California looks cheap to them. They will lose their shirts just like the Japanese did 20 years ago.
This article failed to mention that a large number (if not the majority) of these Chinese “investors” are corrupt local officials and/or their relatives.
That is the fatal flaw of the Chinese system—everyone steals everything and takes it out of the country.
Combine that with totally phony accounting and data reporting and the media reports are left to report nonsense provided by public spokesman (who themselves are looting at every opportunity).
Record gold purchases last month.
Record gold purchases last month.
[sincerity, average] Just a coincidence, I'm sure. [/sincerity]
Imagine a situation in which you lease land (IIRC for 40 years in Red China), improve it and then have to decide whether to invest more in it. At year 35 what do you do?
If the apparatchniks decide to renew your lease you’ll pay dearly, but if you’re successful they’ll deny the renewal and their son, nephew or BIL will take it.
What a horrible system.
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