Saturday, March 31, 2012

Political and Financial Crisis Continues to Intensify in China

The developing financial crisis in China is causing increased dissatisfaction amongst the populace. The central bank along with other central planners have created a phony economy WITH price inflation. Not a very good mix. The global leftists will shout that it is proof that capitalism can't work everywhere. In truth, outside of small pockets of free market activity, central planning is at the core of much Chinese economic activity.

That central planning has caused massive economic distortions and is now rattling the Chinese leadership.

Hans Palmstierna emails and points to a report from UK's The Telegrapgh:

Interesting rumours, I'd say, even if they are untrue. Something sounds like its brewing underneat the surface.
From The Telegraph:
China has arrested six people and shut down 16 websites for spreading rumours that the military was preparing to launch a coup.

The arrests are a sign of the ruling communist party's (CCP) extreme nervousness in the wake of an extraordinary few weeks in which an unusually public power struggle amongst the party elite has seen the one-time politburo contender Bo Xilai deposed.

Rumours that a coup was imminent began spreading after Mr Bo was removed from his position as CCP chief of the southwestern city of Chongqing two weeks ago. Posts on microblogs claimed that armoured personnel carriers and tanks had been seen on the streets of Beijing.

China's state news agency Xinhua reported late on Friday that six people are under arrest for "fabricating or disseminating online rumours".

Sixteen websites have been closed for posting reports of "military vehicles entering Beijing and something wrong going on in Beijing". An unknown number of people were "admonished and educated" for their part in spreading the rumours, according to police in Beijing.

"The rumours have "caused a very bad effect on the public," said a spokesman for the State internet Information Office, while the websites were shut down for not acting to stop their spread. Two of China's most popular microblogging sites, and, were also "criticised and punished accordingly" for their failure to prevent the rumours circulating said the spokesman.


  1. It makes one wonder if the American people even have a clue about what is confronting them, not to mention the majority of our politicians!

  2. Carlyle's David Rubenstein in April 2010

    We've invested more in China than any other private equity firm -- about $2.5 billion of equity and forty-some transactions in real estate, venture, and buyout types of investments. We have about 45 full-time professionals investing in China. All of them are Chinese natives who were educated in the U.S. or other places, in some cases China. We cannot put enough money in China. We'll do every good deal we can find.

    I wonder what Carlyle's risk management strategies are at this point.

  3. I don't know much about China's economy. Is it safe to say that it has followed the West in adopting the central banking model of economics?

  4. Carlyle told Bloomberg recently that it had $3.5 billion invested in China.