by Cautious_Kamakazi
It is worth noting that despite deflation worsening, China's #credit impulse is declining again, showing a #TIGHTENING of #monetary conditions. Many investors had hoped that, as usual, Chinese monetary loosening would lead a US recovery. Some hope. – @albertedwards99 pic.twitter.com/qVitUH1xhM
— Lance Roberts (@LanceRoberts) July 20, 2023
During the 2008 Global Financial Crisis, China’s then-Premier Wen Jiabao declared: “In the face of economic difficulties, confidence is more important than gold and currency.” Consequently, a Chinese economic stimulus worth 4 trillion Chinese yuan ($586 billion) was issued to shore up the economy during that year. This economic measure was Beijing’s largest move to respond to the financial crisis.
Nowadays, the prospects of the Chinese economy are worse than over a decade ago, thanks to both internal and external factors. The unemployment rate of Chinese people aged between 16 and 24 rose to a historically high 20.4 percent this April, along with China’s widely reported population decline, a record low number of marriages, and a downturn in the real estate market. Major banks such as JP Morgan, UBS, and Bank of America unanimously decreased China’s 2023 GDP forecasts.
However, Beijing has been reluctant to take action on another massive-scale stimulus. Recent cuts in lending rates linked to residential mortgages have been largely viewed by many economists as mere window dressing, which may not reverse China’s economic downturn.
The reasons behind Beijing’s lukewarm approach are apparent. In Beijing and beyond, it is almost a publicly admitted consensus that the former investment-stimulated growth model, with 10-plus percent growth a year, is unsustainable.
thediplomat.com/2023/06/chinas-massive-economic-stimulus-is-not-coming-back/
There’s more bad news in China; corruption in massive infrastructure projects has lead their structural failures.
There’s satellite images of a new aircraft carrier with large cracks across two big sections of the flight deck. The steel supplier was arrested for substituting a lower grade steel.
The central government has stopped funding of local governments. To create income they make up laws and collect fines.
A local government recently stopped large convoys of harvesting machines . They refused to let the trucks carrying the harvesters move without paying tribute. The poor drivers didn’t have the ability to pay and the crops rotted in the fields. The farmers lost their entire year’s income.
A section of the three gorges dam has shifted and is visible on satellite.
Things don’t look great for the western hemisphere but China is literally crumbling.
New Youth unemployment numbers came out its 21.3% now. www.bbc.com/news/business-66219007
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