2019: The Chinese moment of truth

Posted: December 17, 2018 in Uncategorized

China in 2019 faces the real moment of truth.

Various indicators shows that China economy is really slowing down:

GDP slowed to 6.5% and probably will slow at towards 6%

Industrial Production, retail sales down, bankruptcies up. 

Unemployment and fixed asset investment stable. Bankruptcies up.

Even more scarily, the Nikkei reported that China is suspending the release of some economic statistics, provoking suspicion. According to the report, the Guandong PMI was not published on its 1-Nov scheduled date. Analysts speculated that it was because Guandong is highly geared towards exports to Europe and the US and the index recently fell below the neutral 50 level. China also stopped disclosing data regarding the exports and imports of crude oil, cars and other major items by country and region since the data for April, making it difficult to make a detailed analysis of the kinds of products China imports from and exports to the US.

And this is in an highly controlled, fake data country. 

Since long time ago (early 2013) my opinion is that it was not so sure China would take over the US.

The only Asian country that successfully escaped what the economist define as the middle income trap* are Japan, South Korea, Singapore, Hong Kong, Taiwan.

All of them as something that China cannot have. Democracy.

Democracy helps to innovate without fear of consequences. China, under President Xi, went actually backwards. Everything is controlled and manipulated and actually kills innovation.

On top of this there is the usual Chinese issues: ageing population, debt level, corruption, environmental issues and simply “the size of everything Chinese – land and population) and the living differential city/country.

President Xi flouted the Deng strategy of lying low (even got rebuked in October 2018 by Deng’s son said to “keep a sober mind” at the 2018 Politburo Congress. A veiled rebuke against going in a tariff war with the USA.

The direction of President Xi of an authoritarian state could prove too much even for China to overcome.

https://en.wikipedia.org/wiki/Middle_income_trap

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