Wednesday, October 14, 2015

China Crashing

Sadly, when China moved away from the oppressive Mao method of rule and move toward more free market operations, government officials copied Western ways in finance and developed a central bank which manipulates the money supply and causes the boom-bust cycle.

It now appears that China is in the earlt statges of the bust cycle.

Real residential property prices in Beijing fell at an annual rate of 5.3 percent in Q1.


-RW

3 comments:

  1. They have interventionism, or state capitalism. No one ever seems to try laissez-faire unfortunately.

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    1. There's a reason why. All those who steal from the productive class would actually have to earn a living. Laissez-faire and government mix like oil and water.

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  2. My limited experience after living Guagxi Province for most of 2012 and part of 2013 is that small business is almost always CASH! If you shop in the major department store in Guilin (a city of 6 million people) and present a credit or debit card, even from the Bank of China, merchants of that size are confused about how to handle it; almost always giving you the deer in the headlights stare. Ninety-five percent of the retail business in that city was yuan rmb. And believe me, there is plenty of price negotiation. Even in large department stores.

    I am not suggesting it represents pure capitalism, but price discovery at that level is definitely alive and well.

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