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How China’s Social Credit Score Will Shape the “Perfect” Citizen
How China’s Social Credit Score Will Shape the “Perfect” Citizen
If you have too much debt and bad credit, it may be tough to get credit cards and loans. The idea is that people less likely to pay pack lenders get less credit.
Well imagine if there was a social credit system. But it was the government that used it to decide who could travel, or live in certain apartments. Imagine if your social credit was too low to send your kids to a private school, or get a better job.
But what kind of behavior would warrant such a score?
China is about to answer all our questions.
The country has a pilot program for a social credit system. The government will rate citizens based on how loyal they are to the state. Already almost 10 million Chinese citizens have been blacklisted.
The Chinese government has ultimate control over their citizens’ lives because almost everything requires the national ID card. And the number assigned to citizens can simply be restricted for whatever the government wants to take away.
The Chinese media refers to those on the list as deadbeats.
Chinese citizens will be rated on their real life and online behavior for things like patriotism, hard work, and avoiding materialism. The system will aggregate all available data, taking into account what books citizens read, what they buy, and how long they spend playing video games.
Bad social credit would eliminate the possibility of starting a business, staying in luxury hotels, and buying or renting property.
Not only will big data be used to rate the citizens, China will also rely on peer ratings. It is the ultimate social governance; making citizens police their neighbors.
By 2020, adults will all have an assigned social credit score in addition to their identity card.
…click on the above link to read the rest of the article…
Chinese Bankruptcies Surge More Than 50% In Q1; Worse To Come
Chinese Bankruptcies Surge More Than 50% In Q1; Worse To Come
Two months ago, when looking at the soaring number of bond issuance cancellations and postponements as calculated by BofA, we commented that it was only a matter of time before the long overdue tide of corporate defaults, held by for so many years by the Chinese government which would do anything to delay the inevitable, was about to be unleashed.
This prediction has indeed been validated and as the FT reports overnight, Chinese bankruptcies have surged this year “as the government uses the legal system to deal with “zombie” companies and reduce industrial overcapacity as part of a broader effort to restructure the economy.” In just the first quarter of 2016, Chinese courts have accepted 1,028 bankruptcy cases, up a whopping 52.5% from a year earlier, according to the Supreme People’s Court. Just under 20,000 cases were accepted in total between 2008 and 2015.
This is surprising because while China’s legislature had approved a modern bankruptcy law in 2007 it had barely been used for years, with debt disputes often handled through backroom negotiations involving local governments. “Bankruptcy isn’t just about creditor-borrower relations. It also touches on social issues like unemployment,” said Wang Xinxin, director of the bankruptcy research centre at Renmin University law school in Beijing. “For a long time many local courts weren’t willing to accept them, or local governments didn’t let them accept.”
However, following the dramatic collapse of global commodity prices, which as we showed last October meant that more than half of local companies could not afford to even make one coupon payment with cash from operations, Beijing had no choice but to throw in the towel. And as the FT adds, “bankruptcy courts have been recruited into China’s drive for “supply-side reform”, which centres on reduction of overcapacity in sectors such as steel, coal and cement.”
…click on the above link to read the rest of the article…
Why China’s Market Isn’t Fixed And The Global Bubble Will Keep Imploding
Why China’s Market Isn’t Fixed And The Global Bubble Will Keep Imploding
China’s stock market is purportedly all fixed and the last two day’s 10% bounce is just the beginning. Indeed, Goldman Sachs has already reiterated that the whole thing is on the level, and that the red chips will again be taking flight:
China’s biggest stock-market rout since 1992 has done nothing to erode the bullish outlook of Goldman Sachs Group Inc………Kinger Lau, the bank’s China strategist in Hong Kong, predicts the large-cap CSI 300 Index will rally 27 percent from Tuesday’s close over the next 12 months as government support measures boost investor confidence and monetary easing spurs economic growth. Leveraged positions aren’t big enough to trigger a market collapse, Lau says, and valuations have room to climb.
Right. The Chinese economy is in an obvious deepening swoon and the median company on the Shanghai exchange had a PE ratio of 60X before the recent break. But no matter. Not only does everything financial race the skyscrapers to the sky in the land of red capitalism, but valuation upside is apparently whatever the comrades in Beijing want it to be.
Says Goldman’s chief stock tout for China,“It’s not in a bubble yet.”.
Why? Because “China’s government has a lot of tools to support the market.”
To be sure, the confident Mr. Kinger Lau was still in diapers when Mr. Deng proclaimed that it was glorious to be rich. Or stated differently, when Deng set aside Mao’s mistaken maxim that power comes from the barrel of a gun in favor of the thoroughly modern notion that prosperity comes from the end of a red hot printing press.
Actually, that’s the heart of the matter. Mr. Lau and perhaps 50 million other Chinese punters believe that growth and wealth are gifts of the state. That is, they believe red capitalism works because the comrades in Beijing are always ready to inject “whatever it takes” by way of stimulus, guidance, controls, ever more debt and now, apparently, prison sentences, too, to keep the bubble expanding.
…click on the above link to read the rest of the article…
