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The Forum > General Discussion > Chasing the dragon.

Chasing the dragon.

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For nearly 3 decades, there has been an unwritten compact between the Chinese communist party and the citizens of China, that in return for a continued rise in living standards, the autocracy of the communist party would be tolerated.

However, it is becoming clear that the stimulus model used to boost growth is beginning to unravel and that either the stimulus is wound back and replaced with a modicum of austerity or there will be a crash of the proportion of the GFC, either of which will result in a restless population.

Perhaps this is the reason that China is so desperately pursuing sovereignty in the south china sea to distract from the looming threat?

http://www.japantimes.co.jp/opinion/2016/01/03/commentary/world-commentary/dangerous-year-china/#.V5QMtbh96Hs

"The verdict of top China economists is unanimous: there is a debt crisis, there are no signs of policy renewal, and a recession is almost inevitable — either sharp and possibly calamitous, or drawn out like Japan’s.

None is willing to punt on the timescale, but all believe this will happen within the medium term — by 2020 or a little after — though not in the next couple of years. For now, on the streets, life looks the same. But it can’t last.

Debt growth has been outpacing gross domestic product growth for years, with its numbers stepping up a year ago, and that gap will widen as the government has to heap ever more stimulus on the economy in order to hit its 6.5-7 per cent growth target.

Outstanding loans now stand at a record high of more than 200 per cent of gross domestic product, almost double the figure in 2008.

Total net debt is estimated at about $35 trillion, borrowed both within China and from overseas. China’s debt bubble — the build-up in unproductive loans — has already accelerated past the US 2007 subprime bubble numbers, it is only a matter of time before some banks find themselves unable to fund all their assets safely."
Posted by Shadow Minister, Sunday, 24 July 2016 10:34:14 AM
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Yep, & thanks to the little time bombs bequeathed to us by Rudd & Gillard, like the NBN, Gonski, the NDIS & a few other stupidities, we will be already deep in debt when this financial crisis hits.

We were smart enough to elect a bloke who tried to fix things up a bit, but weren't smart enough to actually let him get on with the job. Now we deserve everything we get, or actually don't get.
Posted by Hasbeen, Monday, 25 July 2016 12:36:08 AM
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South China sea has oil and Amur Oblast has 70 billion tons of coal and hydro power. It is Outer Manchuria and was annexed by Russia from China in 19th century as training for annexing Ukraine. Scratch marks on Paleolithic camp-fire stone maps prove it was Chinese 85000 years ago. India's water supply from the Himalayas has been Chinese from Aum-aum hare krishna.
Posted by nicknamenick, Monday, 25 July 2016 8:29:35 AM
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It is not unheard of for a country to embark on military adventures as a distraction from actual or anticipated domestic problems. That's why Argentina invaded the Falklands. In that case the result was the end of Argentine military rule. However, China is a much greater power than Argentina, but, hopefully, the eventual result will be the end of the Chinese Communist Party.
Posted by david f, Monday, 25 July 2016 10:54:00 AM
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I have seen other reports on China's debt that is a little higher, than SM's report, ie US$37.5 trillion.
That is almost twice the size of the US debt (US$20trillion.
So that is almost US$60trillion debt that will not be paid off.
Such astronomical figures just have to have a very bad effect on the
rest of the world.

Anyone on here able to tell us how we will feel the effect, certainly
the politicians will not want to talk about it.
Which raises a point, notice how many subjects the politicians just
do not want to know ?
Posted by Bazz, Monday, 25 July 2016 11:23:13 AM
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China had no democracy even under the British but usually had tyrants and civil wars. Red is the correct colour for good fortune and gold stars can't be wrong. A military to face-down the long noses will always be popular along with Middle Kingdom expansion into the trading sea-lanes. This may bring Taiwan back home as its claims are the same . And the new Chinese ship-killer missiles mean business.
Posted by nicknamenick, Monday, 25 July 2016 11:26:27 AM
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