“Don’t give a sword to someone who can’t dance.” – Confucius
Beijing’s intervention
Have Chinese stocks reached a bottom thanks to new government intervention?
From Monday to Thursday this week, the Shanghai Composite Index rose 5.52%. Likewise, Hong Kong’s Hang Seng Index rose 3.53% during this period.
Nonetheless, these indices have a lot of ground to fill. The Shanghai Composite Index has fallen 22.61% since September 2021. Meanwhile, the Hang Seng Index has fallen more than 50% over the past six years.
Chinese stocks suffered combined losses. 7 trillion dollars The poor stock market performance has become an embarrassment to President Xi Jinping.
A few years ago, he had this great slogan: “The East rises and the West declines.” Now he is forcing regulators to come up with a rescue plan.
In late January, Beijing announced a number of interventions to stimulate China’s economy and revive its stock market. Bank reserve requirement requirements were reduced this week on February 5th. 50 basis points. This is expected to secure long-term funds worth about 1 trillion yuan ($139.04).
Beijing has also relaxed rules to allow real estate developers to participate in commercial real estate loans and repay other outstanding borrowings.
Chinese officials also intervened to directly prevent the stock market from falling. sovereign wealth fund Jungbu Heejin I promised to buy more ETFs. China’s Cabinet, known as the State Council, called for strong measures to stabilize falling stock prices. Officials have been quietly urging state-owned financial firms to buy up their A-share holdings to limit selling.
Some economists expect government spending on infrastructure to increase further. It is widely believed that the days of trillions of yuan of cash injections that saved the economy after the financial crisis and the slowdown that followed the 2015 stock market crash are over.
Large infrastructure spending can deliver short-term growth. But as the recent bubble and collapse of the real estate market shows, this will only further distort the economy and push it toward ultimate collapse.
So what will Xi Jinping and the Chinese Communist Party do to maintain power as the economy slumps? What does Chinese New Year (Year of the Dragon) and restless young people have to do with it?
Today we’re scrounging for answers. Where should I start…
paper lantern
Paper lanterns have been used in China since the early Han Dynasty. It dates back to about 150 years before Jesus of Nazareth turned water into wine.
However, no one knows the history or origin of paper lanterns. What is their purpose? What do they symbolize? Is it aesthetically pleasing?
No one knows. And no one cares.
Every day, even after thousands of years, people hang up paper lanterns in the same way. They are lined up in outdoor markets and alleyways for no apparent reason. why? Why not?
Such whimsy has been woven into the fabric of Chinese culture for more than a thousand years. This ambiguity is inherent in Supreme Leader Xi Jinping’s impulses. This impulse is used to make the Chinese public believe that the world is as he says.
This is one of Xi Jinping’s main missions. As a communist dictator, this is serious business. And the collapse of the Ponzi financial structure underlying America’s second-largest real estate developer is no laughing matter. As a result, Xi Jinping faced a huge disaster.
As you know, China’s miracle economy, which was booming from roughly 1990 until the start of the COVID-19 crisis, went bankrupt. The epicenter of the recession was in real estate.
In particular, China’s real estate bubble burst about two years ago when real estate developer Evergrande Group declared bankruptcy. This set off a chain reaction of defaults and business losses that dragged down the Chinese economy.
One of the most critical moments for a communist dictator is when the fate of the country deviates from the five-year planning process designed to govern the country.
For 1.4 billion people, dealing with God only works half the time as long as the people’s reality is somewhat consistent with the official Communist Party line.
Otherwise, it takes strength and fear to maintain the lie.
Tangping
The unintended consequences of China’s one-child policy, implemented from 1980 to 2016, resulted in an unfavorable demographic fate. The birth rate in Korea is only 1.2. This is one of the lowest levels in the world and well below the 2.1 replacement rate.
Additionally, China is facing a rapidly aging society and is quickly becoming the world’s largest nursing home. Moreover, immigration is unlikely to provide the much-needed demographic bailout. China has traditionally remained an isolated country.
The deflation of China’s massive real estate bubble, unsustainable levels of local government debt, declining foreign investment, falling stock markets, a weakening currency, and an aging population. These factors are all coming together at the worst possible time. And the younger generation simply ‘I’m not interested in that.’
There is a popular exercise among Chinese millennials called tangping, which means ‘lying flat’. This is a rejection of the social expectation that the 996 work system must be observed from 9 a.m. to 9 p.m., 6 days a week.
Younger generations see this as a rat race with diminishing returns. Tangping (唐平) means to choose. “Lie flat and take the beating” Through low desires and an indifferent approach to life. This is their moment. ‘Turn on, tune, stop.’
Naturally, the Chinese Communist Party rejected Tang Ping. An agency called the Cyberspace Administration of China ordered online platforms to: “Strictly limited” Post posted on Tangping. Selling Tang Ping branded products online is prohibited.
Lying flat may be a little fun at the moment. However, it is very possible that this childhood indifference can quickly turn into anxiety and then anger.
pass the blame
When the government runs everything, anything that goes wrong is the government’s fault. To this end, China has a long history of internal rebellion.
For example, the Taiping Rebellion in the 19th century resulted in the premature deaths of more than 20 million rebels, officials, and troops. The 1989 Tiananmen Square uprising was a distant reminder to China’s rulers of how quickly a simmering conflict can boil over.
Thousands of years of human history have shown that when rulers are blamed for social problems, they start external wars to shift the blame. Xi Jinping and his colleagues in the Chinese Communist Party are no different.
The escalating conflict with Washington over Taiwan is a complete domestic shift. Likewise, Washington was willing to accept this. Like Xi, Biden needs a distraction from failed policies at home.
In this regard, past presidents have been ambiguous about U.S. protection of Taiwan. That changed in September 2022, when Biden made his full commitment to Taiwan. It doesn’t take much imagination to see where this is heading.
According to the Chinese Communist Party, Taiwan’s unification is “It is a natural demand to realize the revival of the Chinese nation.”
In fact, Xi Jinping and the Chinese Communist Party view Taiwan as Mao Zedong’s unfinished business. Occupying Taiwan by force, if necessary, has been the goal for over 70 years.
Considering China’s population is beginning to decline, if the Chinese Communist Party is to take care of this unfinished business and take over Taiwan by force, it will have to do so sooner rather than later.
year of the dragon
With Washington distracted by the Russia-Ukraine war, the Israel-Hamas war, drone attacks on container ships in the Red Sea, the burgeoning war with Iran, border turmoil and the presidential election, this year will be better than ever. no see. This is to seize the opportunity for China to attack Taiwan.
Chinese New Year begins on Saturday, February 10th. According to the Chinese horoscope, 2024 is the year of the dragon. Especially for wood.
In Chinese mythology, dragons symbolize authority, prosperity, and good luck. 2024, the Year of the Wood Dragon, is expected to bring evolution, improvement and abundance, combined with the nutrient-rich wood element.
The dragon is considered one of the luckiest and most powerful animals in the Chinese zodiac. Perhaps the stars predict that China will take over Taiwan in 2024.
In this regard, as Tangping practitioners become increasingly anxious, they want to hold on to a greater purpose in life. The Year of the Dragon can stimulate their calling.
Clearly, the geopolitical implications of China’s attack on Taiwan are enormous. In addition to the enormous cost in people and resources, it would completely devastate a global financial system that is already close to the point of failure.
But the crazy powers in Washington don’t seem to know or care. They are prepared to print huge amounts of new money to finance further wars or further escalation of war.
And even if a cool-headed attitude prevails in Beijing, the global impact of China’s worsening economic situation will be a drag on all economies. China has been the biggest driver of growth over the past 30 years.
How will the U.S. economy respond to China’s continued economic weakness? Will the Shanghai and Hong Kong stock market epidemic spread to Wall Street?
The answers to these questions will soon be known. But if you think about it honestly, it’s clear that it’s already clear in your mind. It won’t be pretty For most people.
thank you,
minnesota gordon
for economic prism
Return to the economic prism in Tangpyeong in the Year of the Dragon
