China Won’t Save the Day For Europe… or Anyone Else… It Will Collapse Just as the USSR Did

Tuesday, March 6, 2012
By Paul Martin

by Phoenix Capital Research

The world continues to believe that China is somehow this economic juggernaut that will not only push through any recession but will even bail out those less solvent countries and save the world.

My view is quite the opposite. China hides its federal debts by dumping them into its state-owned-entities. The REAL Chinese Debt to GDP ratio is north of 200%. And the country is witnessing a property bubble in several of its major cities that will do what all property bubbles do: burst and wipe out millions in its citizens’ capital.

Aside from this, China has two major problems from an economic standpoint: unemployment and inflation.

Regarding #1, China cannot risk a severe economic slowdown. There are already over 30 million Chinese who have lost their jobs, left the coastal cities, and are moving back to the countryside. These are hungry mouths looking for food.

Moreover, during times of economic turmoil, civil unrest grows. Since 2006, China has averaged 90,000+ “mass incidents” (riots and protests) per year. In 1993, during the boom years, this number was less than 10,000.

Suffice to say, an economic slowdown is a MAJOR problem for China’s Government. And it brings with it civil unrest.

This is most recently clear in the village of Wukan, which in September began a series of protests based on the fact that the Government took away the villagers’ farmland and fishing rights (thereby removing their primary means of earning a living).

Wukan began a mass sit-in/ protest. The tiny village of 13,000 has since become such a headache (thanks to the international press) that China’s Government actually let the villagers vote on who should be their local officials.

The Rest…HERE

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