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Inside the Chinese Meltdown Rocking Wall Street
The Skinny on How This Monster Economy Is Losing Steam – and the Worldwide Fallout
The Year of the Red Monkey, also known as the Fire Monkey, starts next month in China. According to Chinese astrologers, the year will be a real rollercoaster ride, filled with surprise and mischief. And, they say, it bodes well for individual initiative, as opposed to collective effort.
Will these predictions become self-fulfilling prophecies?
In the first trading days of 2016, a full month before the arrival of the Fire Monkey, the world saw dramatic evidence of the collateral economic damage that can be wrought by gyrations in Chinese equity markets. Over 140 China-based companies listed on American exchanges lost $45 billion in valuation, according to USA Today.
China’s regulators spent billions in just a matter of days to try to stabilize their own exchanges. Market watchers around the world held their breath as a Maalox moment become a Maalox week. If we did not know it before, the start of 2016 has made it increasingly apparent that the fate of the global economy, and our shared planet, is tied up in the future of China.
The world’s most populous country, and its second largest economy, China is at a crossroads. Its Communist Party leadership has built a thriving economy based on exporting manufactured goods to the world at prices no one else can match. But that strategy has been paying diminishing returns in recent years, as Chinese production costs rise and new competitors grab a share of the market. But to keep their hold on power, the nation’s leaders need to keep money flowing to people who have had a taste of the good life.
“Since 1979 they have lifted 200 to 300 million people out of poverty and into the middle class,” Michael Santoro, professor of international business ethics at Rutgers Business School and a China expert, told WhoWhatWhy. “But we forget how many really poor people there are still in China. There are more people under the World Bank poverty line in China than the total number living in the United States.”
To keep the economic engine purring, China’s leaders are attempting to pivot from a purely export-based economy to one driven more by internal consumption, along the lines of Western economies like the United States’. But these efforts may run up against structural problems not so easily overcome by central government dictates.
After decades of double-digit economic growth, China is one of the most polluted countries in the world. Air and water pollution has become so bad that the government has had to shut down some factories and reduce hours of operations for others. During some high-pollution days in the last few weeks, all the schools in Beijing, the capital, were closed.
Currently, China feeds 20% of the world’s population but contains just 7% of the planet’s farmland. This already dangerous mismatch is getting worse.
Rapid population growth — China’s population is expected to reach 1.38 billion in 2016 — along with urban sprawl, has put the country’s most productive farmland under severe pressure. According to the Lincoln Institute of Land Policy, the current trajectory of land use raises serious issues about how China will feed itself in the future. “It seems inevitable that the tensions between the Chinese people and the use of their land will only escalate in the next decade or two,” writes Chengri Ding, in a post for the Lincoln Institute. (He is director of the Joint China Land Policy and Urban Management Program of the University of Maryland and the Lincoln Institute)
Historically, Americans, and Westerners in general, have remained largely ignorant of a nation and culture that pre-dates their own by thousands of years. (In the Chinese calendar, next month will begin the year 4713.)
For a glimpse of how the Chinese themselves view the challenges ahead, we can turn to an account in China Daily of the top ten social–policy priorities set by the nation’s leadership.
At first glance, it appears that the government is responding to calls for more openness and freedom of choice in Chinese society.
In a major concession, China will abandon its long-standing policy of restricting married couples to only one child. Now couples will be allowed to have two children — and even more if they qualify under certain regulations.
In addition, authorities will now grant household permits for all Chinese, including so-called “unregistered citizens.” This will allow as many as 300 million migratory workers to register for social welfare programs and, for the first time, take up a fixed address. At the same time, officials will try to direct this transient and rural population to China’s second-tier cities, where the surplus of vacant housing has reached crisis proportions.
The government has also pledged increased support for China’s twenty-somethings who would like to become entrepreneurs.
On the ecological front, officials have tightened existing environmental laws and will impose much heavier fines on polluters. In a nation where cigarettes are ubiquitous — China is the world’s largest producer and consumer of tobacco — smokers will face steeper fines. And to combat endemic corruption, the central authorities are requiring sanctions for municipal officials who conceal pollution, falsify data, or fail to enforce environmental laws.
Under a new water-pollution reduction program, the state promises that 70% of the water in the nation’s seven major river basins— including the Yangtze and Yellow Rivers — will be in good condition by 2020. In addition, China has committed to clean up its most toxically contaminated urban waterways by 2030.
But how will the people of China, or for that matter the rest of the world, know whether the country’s leadership is living up to these ambitious goals?
In a country where even “official” statistics are, to put it mildly, suspect, this fundamental lack of trust may be a major impediment to the planned restructuring of China’s economy, environment and society in the coming decades.
What has kept the peace in China in recent decades is an unspoken agreement between governed and government: the Chinese people cede political control to a self-perpetuating elite in exchange for ever-increasing material rewards. If the authorities fail to deliver on the promised bounty, this agreement may unravel. Should this happen, the profoundly destabilizing consequences will be felt around the world.
This is Part 1 of a three-part series.
13 Comments on "Inside the Chinese Meltdown Rocking Wall Street"
Go Speed Racer on Wed, 13th Jan 2016 9:44 am
The Chinese have always had an excellent national policy, regarding toxic industrial waste.
They mix it into their cheap particle board furniture, and sell it to us.
paulo1 on Wed, 13th Jan 2016 9:46 am
regarding:
“If the authorities fail to deliver on the promised bounty, this agreement may unravel.”
You’re not kidding!! The problem is that there is such a thing as limits, and the leaders are bumping up against almost every one of them. When they reach limits in credibility and patience, there will be blood and upheavel.
Davy on Wed, 13th Jan 2016 10:09 am
The Chinese leadership is not trying to do anything but survive. The whole edifice is on the edge. This talk about going from an export economy to service one is bs. What are they going to do with the rust belt that is an entire country? China and the world are in an end game. Look to China and the US to see how this will unravel. Too bad the rest of the world can’t enjoy their popcorn with what happens in China and the US because it is their ass too.
Baptised on Wed, 13th Jan 2016 10:33 am
China, Saudi, etc. are pulling down their USA bonds? My view is a big part of the world is very nervous at who our next Prez. will act like. Plus who are these tiny Bahama islands that are buying the bonds they are dumping? When we hit 20 trillion debt, it will be not just physically, but also psychologically damaging.
theedrich on Wed, 13th Jan 2016 7:45 pm
The conundrum for unicornists is that their anti-White war and BAU are in conflict with each other. The globe’s limits to growth are what is behind the current malaise. Ignoring this, the White genosuicidists have convinced themselves that the downspiral of economy and ecology can be overcome if only Whitey imports a trillion swamplanders and in the process dies himself. Angel Merkel and the Ø are agreed on this.
Yet as it turns out, China, the biggest and best of the Third World, with a Commie heaven that the Demonic Party can only dream about, and with an average of IQ five points higher than Whiteland, is imploding both economically and ecologically. First they tried a one-child policy, and have now reversed it. Their über-rich are fleeing to the Man-ape’s Hongcouver (if they can’t get to L.A., that is), and their billion-plus population has to endure massive explosions, avalanches and corruption of biblical proportions. Not even Krugman or Helicopter Ben have answers to Chinkland’s predicament.
And to repeat: China is the cream of the Third World. Our elites, on the other hand, are importing from the world’s sewers creatures of far lower IQ and with propensities toward much greater violence than the Chinese by the hundreds of thousands, maybe millions. It is not enough that we have a deteriorating population of our own, sickening on narcotics from Spicland and Afghanistan. No, we “need” more “diversity” (i.e., non- and anti-Whites).
If China is having massive problems right now, we can expect to overtake its example to a far worse state as we destroy our demography even further.
makati1 on Wed, 13th Jan 2016 7:48 pm
Baptised, you can see the coming cliff and it as a sign that says “Collapse Ahead”. It is not only posted in China but in the US and EU and …
To blame China is to point the other four fingers back at America where it all started and where it will finish with a bang that will rend aside forever the paper curtain that is hiding the 3rd world conditions there.
The Sinophobes and Russophobes want so desperately for those two countries to buckle and fail that they are sacrificing what is left of the West to do it. Suicide by any description.
Who will come out of the collapse in better form? I would say that Russia and China will. Why? They are in a better position than America. Their government already controls most everything important. Their people are used to doing without. They are partners where it counts, resources and military. That is what America fears.
So, enjoy your gloating now Russophobes and Sinophobes. It will not last much beyond the next American election. Maybe sooner.
Apneaman on Wed, 13th Jan 2016 8:22 pm
Douch, I’m NOT anti white, I’m anti retard, anti mericun. I’m also pro life which is why I’m pro ape extinction. Of course none of it matters since I have zero influence on the outcome. Just like you. Do you think your propaganda means anything? Think you are converting others to the cause? No. Everyone on the planet could be of one “race” and it would not change the inevitable coalition and tribeing up that always happens when apes and the other monkey troops are under pressure or think they are. You have substituted race and a fantasy version of western culture for religion and god. You are exactly the same as those you claim to despise. You have been ruled by scummy white men your whole life and always will be. It will never get any better than yesterday and if you are killed in the coming chaos, the overwhelming odds are that it will be a white man who does you. Chances are he will be wearing a uniform of some kind. Can you picture white christian fundamentalists coming to power? Imagine what they will do to a loud mouth atheist like you?
Apneaman on Wed, 13th Jan 2016 11:02 pm
Little Douche and his kind can barely help themselves. Pre programmed monkeys.
How Our Brains Respond to Race
New research shows that the brain’s response to faces of different races develops at a young age
“Scientists have used neuroimaging to study the responses of our brains to faces of different races and have uncovered a disquieting result called the “other-race effect,” or ORE.
Our brains distinguish race insanely quickly, within tenths of a second. An other-race face tends to activate the amygdala, an ancient brain region central to experiencing fear and anxiety.”
http://www.wsj.com/articles/how-our-brains-respond-to-race-1452094579
makati1 on Thu, 14th Jan 2016 6:09 pm
BTW: That picture could be of Pittsburgh about 50 years ago. We just shipped our pollution to Asia in the form of factories. Now we blame THEM for polluting to make our stuff.
BC on Thu, 14th Jan 2016 7:41 pm
Allow be to risk discrediting myself in a sympathetic (???) forum by acknowledging theedrich’s perspective, which is historically validated. (Theedrich, feel free, as I know you will, to challenge, even eviscerate, my interpretation.)
That is, any empire/civilization that permitted/encouraged/was characterized by “diversity” or “multi-culturalism” was overrun by “other” or “barbarians at the gates” and eventually disintegrated and collapsed.
This is not an ideological bias or racist screed, I plead; it’s just what happens when successive generations of the dominant majority ethnic elites become self-satisfied, insular, protected, and detached from the necessary productive activities (and risks) of the economy and society, disengage, and acquiesce to the mass-social, dominant, “decadent” impulses that are predictably characteristic of human apes throughout history.
The Donald is, in some respects, taking advantages of, and giving a mass-social voice to, the cumulative effects of a generation’s worth of economic and political anxieties of the Anglo-Saxon and Scots-Irish, White, middle- and upper-middle-income working-class masses who perceive themselves (privately) as powerless in the face of Peak Oil, overpopulation, mass immigration, and the increasing existential risks to their worldview that sustains their basis for existence and desire to abide.
This is not a “racist” perspective per se but one based on practical survival and arguably a prudent attempt to self-identify with a way of being or group solidarity that assuages fears, which in turn naturally motivates anger, resentment, and acting out of same against those perceived as a threat, correctly or otherwise.
So, I appreciate, and I think well understand, others here who viscerally react to theedrich’s perspective. What he (forgive me if the assumption is erroneous) relates is profoundly reflective, factually grounded, and highly instructive to understanding the conditions of our time.
Thanks to theedrich and to his (???) opponents for enlightening us to our predicament as a civilization and a species.
BC on Thu, 14th Jan 2016 8:06 pm
@apnea: “Our brains distinguish race insanely quickly, within tenths of a second. An other-race face tends to activate the amygdala, an ancient brain region central to experiencing fear and anxiety.”
We human apes are here in all of our “diversity” of physical characteristics and remarkably adaptive traits to local geographical, topological, thermodynamic/biophysical conditions BECAUSE OF our “face-based racism”. 😀
But our “face-based racism” will also likely be a factor in our mass die-off in the next 2-3 decades.
We (speaking for my apish self) pink/Caucasian apes are a novel, post-Ice Age, northern-latitude “mutation” in the ongoing evolution of the human ape species. It’s not inconceivable that our genetic line will cease to reproduce sufficiently in the future to exist in 2-3 generations.
Our likely human ape lineage (like it or not) will be fossil fuel-deprived, shorter, small-framed, dark-skinned, “lower-IQ” human ape descendants, i.e., Richard Duncan’s back to Olduvai, who probably won’t have a written language and will never have heard of Plato, Aristotle, Cicero, Jesus, Shakespeare, Dickens, Doyle, Wells, Faulkner, Hemingway, Einstein, Salinger, nor the Beatles, Led Zeppelin, Rush (“2112”), David Bowie (RIP), Lemmy (RIP), Miley Cyrus, and Snoop Dogg. 😀
Apneaman on Thu, 14th Jan 2016 9:00 pm
BC, you don’t think there will be a little Homo floresiensis, Geddy Lee in some far off ape future? Don’t kill the dream man.
Kenz300 on Fri, 15th Jan 2016 10:42 am
China has begun to address its pollution problems and is making a major push to renewable energy sources and electric vehicles.
China to Increase Wind, Solar Power Capacity by 21 Percent in 2016 –
http://www.renewableenergyworld.com/articles/2016/01/china-to-increase-wind-solar-power-capacity-by-21-percent-in-2016.html