China Challenges the West… Using Their Own Tools Against Them
China’s Economic Recovery Masking Financial Risks, Fitch Says ... Are We Heading Back Into China Markets Turmoil? ... -Bloomberg
China is run by a communist party but its policies are increasingly mercantilist and reminiscent of European and US strategies.
Whether the world is run out of Washington or Beijing, the economic, political and military approach is increasingly similar.
China is in better shape financially than the West because of its central bank's emphasis on buying and retaining gold. China probably has at least several thousand tons of gold stored on the mainland, though officials will only admit to around 1,000 tons.
In fact, China just announced that it would create its own price fix for gold to compete with prices set in London. Additionally, the price fix will not be convertible to dollars.
But China's debt driven economic policies at the federal level are just as reckless as US policies, or European ones, as we can see from this latest article posted at Bloomberg.
More:
Andrew Colquhoun ... the head of Asia Pacific sovereigns at Fitch Ratings, sees the growth spurt, fueled by a resurgence in borrowing, threatening to wreak havoc on the financial system.
"Whether we call it stabilization or not, I am not sure," Colquhoun said in an interview in New York. "From a credit perspective, we'd be more comfortable with China slowing more than it is. We are getting less confident in the government's commitment to structural reforms."
Standard & Poor's and Moody's Investors Service both chopped China's long-term credit rating outlook to negative last month. Expanding sovereign debt and a lack of market reforms prompted the downgrade.
China's new credit increased a whopping 4.6 trillion yuan ($712 billion) in the first quarter alone. This was more than the money printing that took place in 2009 when Chinese officials were desperately trying to restart China's economic motor.
China is said to be on course for growth of 6.5 percent this year, though that number is probably as bogus as previous "growth" numbers. It does imply that China will print as much money as necessary to keep the economy revving.
George Soros, among other China watchers, believes that China really doesn't have an industrial growth strategy - just the same solution as Western countries in similar positions.
The remedy is simply more and more money printing. Lower rates fuel enormous amounts of credit expansion. That's the extent of China's manufacturing remedy.
Bloomberg quoted Soros as saying that what's going on in China “eerily resembles what happened during the financial crisis in the U.S. in 2007-08, which was similarly fueled by credit growth.”
Soros made his China views clear at the World Forum in Davos and has repeated them since then. He believes that China is in for a very "hard landing" because Chinese officials have cut neither spending nor debt issuance.
While Chinese state-run media rebut Soros's views, there is much to confirm it. Housing values are climbing to new height, with new-home prices in some places soaring a whopping 62 percent in a single year.
Understandably, Chinese politicians might want to change the subject - and in this case have done so by announcing ambitious plans for space exploration.
The UK Daily Mail recently posted an article entitled. "China wants to land on Mars by 2021."
Top official at the country’s space agency reveals plans for mission to the red planet ... Mission chief spoke … about plans for Mars and moon missions ... The agency is planning to launch a mission to reach Mars by 2021 It also plans to establish a lunar research base and explore the moon.
An significant agenda and one that is reminiscent of NASA ambitions. In fact, while NASA is banned from Chinese space cooperation, Chinese officials are voicing enthusiasm about working with the US agency at some point.
While the Chinese focus on ambitious space goals (that may or may not be practical), President Xi Jinping is achieving additional goals of his own. Early in April, Xi revealed his new military title as "commander-in-chief of the PLA's Joint Battle Command" and celebrated with a new camouflage uniform.
Analysts have now compared Xi's military status with that of Mao Zedong and Deng Xiaoping, saying his military control was unparalleled in recent memory.
Here, from the Daily Mail:
Observers said the post and uniform were aimed at sending a message to the world that he was not only the top administrative leader of the world's biggest army, but also the chief commander of the fighting force.
Xi is also purging the Chinese military, according to a post at The National Interest. He just signed off on an a major structural reform of the People's Liberation Army (PLA) that will be pursued through 2020.
Here:
While understanding the details of Xi's reforms is critical to assessing the direction of PLA modernization going forward, it is also necessary to consider the broader implications of Xi's apparent relationship with the military.
Many observers have stated the obvious: Xi is as "large and in charge" in military circles as he is in Chinese politics generally.
When it comes to economics, space exploration, leadership or military control, the Chinese approach seems similar to that of large Western countries and especially the US.
As we've pointed out before the Chinese economic system and the behavior of its tops economists align with Western Keynesian orthodoxy. Its space program and military strategies resemble Western ones as well in that they are quite significant in terms of size and cost but still operate under civilian control.
Parallels between Chinese sociopolitical and economic structures and the West’s are increasingly evident. In some ways, China resembles an authoritarian version of the United States, though in some ways, parts of the Chinese economy may actually be freer than the US’s.
But given the way that China is evolving – all of Asia, really – one cannot expect that the system will present significant variances from Western ones. The world is growing smaller but it is also growing more homogenized.
Conclusion: Increasingly, the world’s power centers offer the same solutions, the same structures, the same overwhelming sovereign and consumer debt and societal manipulations. If you want to create a life that is not increasingly controlled by mercantilist strategies, you’ll have to do it on your own.
You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.
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