China’s economic imbalances are turning only more precarious. For example, there are an estimated 300 EV manufacturers in China. Talk of “deflation” misses the point. The maladjusted Chinese system now requires upwards of $5 TN [of new debt] annually to hold systemic Bubble collapse at bay. At Beijing’s direction, “Terminal Phase” Credit excesses continue to promote rapid expansion of increasingly suspect loans. Enormous amounts of new Credit are being allocated to uneconomic enterprises, either funding the investment spending necessary to meet growth goals or extending additional Credit to loss-making enterprises to keep them afloat. Importantly, this is prolonging the parabolic rise in system risk, the type of late-cycle dynamics that risks a crisis of confidence in a system’s banking system and currency.
https://creditbubblebulletin.blogspot.com/2024/01/weekly-commentary-pricing-six-cuts-and.html
January 12 – AFP: “China’s military on Friday vowed to ‘crush’ any efforts to promote Taiwan’s independence, a day before a crucial election on the self-ruled island which Beijing claims is part of its territory. ‘The Chinese People’s Liberation Army maintains high vigilance at all times and will take all necessary measures to firmly crush ‘Taiwan independence’ attempts of all forms,’ defence ministry spokesperson Zhang Xiaogang said… Zhang accused Taiwan’s ruling Democratic Progressive Party of pushing the island ‘toward the dangerous conditions of war’ by purchasing arms from the United States.”
h/t mark000