{"id":24833,"date":"2017-08-22T19:22:33","date_gmt":"2017-08-23T00:22:33","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24833"},"modified":"2017-08-22T19:22:33","modified_gmt":"2017-08-23T00:22:33","slug":"the-chinese-economys-fatal-flaws","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24833","title":{"rendered":"The Chinese Economy’s Fatal Flaws"},"content":{"rendered":"

The Chinese Economy’s Fatal Flaws<\/a>\"chinaeconomy.PNG\"<\/h3>\n
Dr. Per Bylund\u2019s recently published article<\/a>\u00a0poignantly\u00a0states one of the core problems in the Chinese economy and its\u00a0the state-manipulated Keynesian foundation. I do agree with his opinion. And if we dig deeper into the exact situation of Chinese economy, we will find that it\u2019s a typical failing of the Keynesian, cronyist system.<\/div>\n
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By using the perspective of Austrian business cycle theory, lets take a look at China\u2019s real estate industry<\/a>, which is suffering more and more painfully from artificial credit issued by China\u2019s central bank, the People\u2019s Bank of China (PBC). During the 2008 global economic crisis, China\u2019s central government issued the famous RMB 4 Trillion Stimulus Package Plan<\/a> (equaling to $586 billion). Since 2009, the Chinese real estate economy has already suffered from three small economic cycles. As it is becoming more difficult for real estate companies to live on artificial prosperity, the duration of every business cycle has become shorter than the previous one. We also see more and more ghost cities because of the economic boom in every sub-economic cycle. There were at least 12 ghost cities founded in 2013<\/a>, and the number of them jumped to at least 50 in 2017<\/a>! Bankruptcy is happening more frequently among Chinese real estate enterprises. Since 2016, at least three real estate companies \u2014 with a combined debt of at least RMB 763 million\u00a0\u2014 have gone\u00a0bankrupt. The story of bankruptcy is continuing, with one of the biggest real-estate-driven enterprises, Wanda Group, facing<\/a> financing problems. If Wanda no longer has access to cheap debt, it might not be able to refinance or roll over all its debt again. If Wanda has to face bankruptcy, it could possibly accelerate an end of the the current Chinese boom.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Chinese Economy’s Fatal Flaws Dr. Per Bylund\u2019s recently published article\u00a0poignantly\u00a0states one of the core problems in the Chinese economy and its\u00a0the state-manipulated Keynesian foundation. I do agree with his opinion. And if we dig deeper into the exact situation of Chinese economy, we will find that it\u2019s a typical failing of the Keynesian, cronyist […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[130,7617,15702,15701],"class_list":["post-24833","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-mises-institute","tag-per-bylund","tag-william-hongsong-wang"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24833","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24833"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24833\/revisions"}],"predecessor-version":[{"id":24834,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24833\/revisions\/24834"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24833"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24833"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24833"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}