Free Republic

IT is ChINA’S gravest economic test since the most far-reaching of Deng Xiaoping’s reforms began in the 1990s. Last year the country achieved growth of 5%, but the pillars of its decades-long miracle are wobbling. Its famously industrious workforce is shrinking, history’s wildest property boom has turned to bust and the global system of free trade that China used to get richer is disintegrating. As our reporting explains, President Xi Jinping’s response is to double down on an audacious plan to remake China’s economy. Blending techno-utopianism, central planning and an obsession with security, this sets out China’s ambition to dominate...

Amidst the deflation of the Chinese bubble gaining momentum, Beijing is responding with increasing desperation, resorting to extreme measures to salvage the nation’s financial stability. The property market is at the epicenter of the storm, with policymakers applying unprecedented pressure on banks to address a monumental $446 billion funding shortfall. This funding is urgently needed to stabilize the industry and complete millions of unfinished apartments. A draft list of eligible developers, including industry giants like Country Garden Holdings Co. and Sino-Ocean Group, reveals a strategic pivot to aid some of the most distressed builders. However, the challenges are far-reaching, encompassing...

* US President Joe Biden said China's economic problems could keep Beijing from invading Taiwan. * Biden said Chinese President Xi Jinping has his "hands full" with China's economic issues. * Beijing claims self-ruled Taiwan as its territory and has been stepping up military drills around the island. China's probably too busy with its economic crisis to bother about invading Taiwan, US President Joe Biden said on Sunday. China's "difficult economic problem" currently is unlikely to cause the country to invade Taiwan, Biden said at a press conference during his state visit to Hanoi in Vietnam, according to a recording...

One in five youths in Chinese cities is unemployed, and the situation could worsen before it improves. The programme Money Mind finds out why some young people cannot find jobs, and the unconventional choices some have made.Since the start of the year, vlogger Zhang Jiayi’s typical working day has looked like this: Talking morning walks with her parents, accompanying them to the market for groceries, preparing lunch, then taking a nap before tending to other chores. The 31-year-old is a “full-time daughter”, a concept — and social media hashtag — that has surfaced as China’s youth unemployment in cities hits...

Renowned geopolitical analyst Peter Zeihan recently made a startling prediction during an interview with commentator Joe Rogan. Zeihan believes that China's collapse is imminent, with only 10 years remaining before potential disaster. The crux of his prediction lies in his assertion that China has misrepresented its population numbers, leading him to estimate that the country's actual population is lower by 100 million than what the government has officially reported. "This is their last decade," Zeihan said of China. When Rogan clarified by asking, So, you're saying that China has 10 years to go?" His response was, "At most." Some argue...

I admit to being a bit obsessed with this story and I’ll also admit the reason is largely schadenfreude. I’m enjoying seeing China’s arrogant nationalists, the communist apparatchiks who believe the party knows what’s best for everyone getting humbled by the simplest of problems: economic reality. After seizing the freedom of millions of people in Hong Kong and threatening to do the same to Taiwan, China suddenly finds itself facing a severe crisis of confidence.For much of the past four decades, China’s economy seemed like an unstoppable force, the engine behind the country’s rise to a global superpower. But the...

Social unrest has erupted in China after almost $6 billion worth of deposits froze up. Thousands of police were deployed to shut down the protest. Following the protest, hundreds of thousands of Chinese homebuyers refused to pay up to $300 billion worth of mortgages. Mortgage payments have reportedly stopped on 301 projects in 91 cities. China is experiencing a repeat of the 2008 recession but on a whole new level. An entire social revolt is growing as the CCP desperately censor the growing uneasiness. Internal government meetings have revealed substantial stress within the CCP and the signs are showing that...

In the anatomy of an economic crisis, a bank run is the point of no return. Bank runs occur when people scramble to withdraw cash from banks in fear of collapse. In the worst cases, banks’ liquid cash reserves are exhausted, not everyone gets their money and the bank defaults. It’s a grim scenario which, fortunately, has occurred rarely in history. The most significant bank runs in the United States took place during the 1930’s Great Depression. More recently, there were runs on numerous U.S. banks during the Financial Crisis in 2008. In Asia, bank runs have also been rare....

CommentaryA few months ago, when investors started to discuss the troubles of Evergrande, China’s largest real estate developer, many economists saw the problem as isolated and insignificant. The consensus message was that the real estate crisis was containable and that the Evergrande default would be a single case. However, Chinese defaults on local and overseas bonds rose to a record $43 billion in 2021, according to Bloomberg, led by widespread defaults in the real estate sector.Up until a week ago, the bonds of Zhenro Properties Group were seen as safe, and the company was widely perceived as a rare case...

Chinese property developer Fantasia Holdings failed to repay a $206 million bond payment due Monday, said the company, just two weeks after it said it had no liquidity issues. The missed payment adds to the already immense strain on China's real estate sector, which has been left exposed to the $305 billion credit crunch from property giant Evergrande, the most indebted company in the world. Fantasia is worth $415 million, reported Reuters, a drop in the ocean compared to Evergrande's crisis. But its bond default contributes to fears that an imminent major collapse in China's property market could destabilize the...

Back in the 1980s, the big fear was that Japan was buying up America. At the start of the third decade of the 21st century, the fear is that China is buying up America, a threat much more potent than Japan ever was. Unlike China, which expanded by building a better mousetrap, China’s reach is predicated upon Marxist expansionism, military and private-sector espionage, corrupt business practices, slave labor, and a large military.Investing.com assembled a list of 76 American brands that China owns in whole or in part. (There are also companies that Hong Kong owns but China’s aggressive inroads in...

This isn’t as much hyperbole as it sounds: the main reason investors bought bonds issued by Chinese state-backed companies is an implicit guarantee from default by the local or provincial government. That belief has been shattered by a recent spate of defaults by major Chinese state-owned companies. Yongcheng Coal and Electricity Holding Group, a state-owned coal company, defaulted on a $152m bond in November. At the time of the default, Yongcheng was a AAA-rated company by Chinese domestic credit rating agencies. This became, pun unintended, the proverbial canary in the coal mine. Shortly thereafter, Tsinghua Unigroup, a state-backed technology company...

The flooding, which started to recede in late July, inflicted the worst natural disaster in a decade on a country still recovering from the pandemic. At least 158 people have died or gone missing and 4 million have evacuated their homes. But so far, it has not dealt a knockout blow to the economy. In fact, Li Yao, a fellow at the East Asia Institute at the National University of Singapore, estimates in preliminary research that the 2020 flood will shave 0.17% from China's 2020 GDP, far less damage than in previous crises. “It should not be hard for China...

More than three years ago, we explained why "the fate of the world economy is in the hands of China's housing bubble." As we said at the time, "China has always been a serial bubble inflator courtesy of a closed (capital account) economy, and nearly $30 trillion in bank deposits [$40 trillion as of July 2020] which slosh from one asset class to another, be it the stock market, bitcoin, commodities, farm animals or - most often - housing. " Why is it so important for China to consistently reflate this bubble? The answer is simple: for China's middle...

BEIJING—A coronavirus outbreak in China which has killed dozens of people and spread to many countries is expected to hurt its economy, an engine of global growth, though analysts say it is too early to quantify the overall impact on businesses and consumers.The consensus is that in the short term, economic output will be hit as Chinese authorities step up preventive measures, impose travel restrictions and extend the Lunar New Year holidays to limit the spread of the virus.Millions who usually travel during this period have canceled their plans, with the government ordering that full refunds be provided to air...

The number of US companies on the list has declined to 121 from 126 last year The contribution of state-owned enterprises has risen to 80.2 per cent of Chinese companies on the list from 76.3 per cent last year In a first, more Chinese companies have made it to Fortune magazine’s list of the world’s top 500 firms this year, than from the United States. A total of 129 companies, including 10 from Taiwan, were ranked among the world’s biggest firms by operating revenue, according to a list released on Monday. Their number rose from 120 last year, while the...

Tensions escalated between the United States and China when Trump wrote in a tweet on May 5 that he would increase tariffs on $200 billion Chinese goods to 25 percent from 10 percent. Trump accused Beijing of backtracking on its commitment to deliver structural reforms. The dispute revealed the vulnerability of China’s stock market, with the Shanghai Stock Exchange Composite Index falling nearly 6 percent on May 6, the day after Trump’s tweet. The stocks haven’t recovered since then. The total outflow from Chinese stocks by nonresidents since tensions escalated reached $6.2 billion, according to IIF, which has tracked capital...

According to research from the Center for Economics and Business Research in London, China will overtake the United States as the world’s largest economy by 2032. “In 2032, three of the four largest economies will be Asian – China, India, and Japan,” Bloomberg News points out, citing CEBR’s research. India will pass the United Kingdom and France next year, and will pass Germany by 2027. South Korea and Indonesia will knock G7 nations Italy and Canada out of the Top Ten list by 2032. Writing at Bloomberg View in October, Noah Smith argued that China has already surpassed the United...

Chinese “depreciation” and all its ensuing hysteria occurred just about a year ago. It has also been a about a year since I co-wrote a book on China with Worth Wray titled A Great Leap Forward? The title was meant to be ironic. The original Great Leap Forward was imposed by Mao in the 1960s. It was one of the most economically disastrous times in Chinese history. Food production increased, yet 30 million people starved. China underwent a true financial and economic crisis due to the insanity of central control of markets. China now attempts something that is as powerful...

Brazil, Russia, India, China and South Africa seem to be failing to justify predictions of 21st century domination ___ The political crisis in Brazil over economic mismanagement and high-level corruption, likely to come to a head next week, has reinforced the fashionable view, popular among western governments and businesses, that the Brics bubble has burst. Members of the exclusive Brics club of leading developing countries – Brazil, Russia, India, China and South Africa – are failing to justify predictions that, separately and together, they will dominate the 21st century world, or so the argument goes. The Brics concept, plus acronym,...