Hidden
Chinese
Economy
BY
WWW.PROFITABLEINVESTINGTIPS.COM
China has been the wonder of the economic
world over the last forty years.

http://www.profitableinvestingtips.com/profita...
With growth rates often exceeding ten
percent per year China has moved too first
place in the world in value of exports.

...
However, China ranks sixth in gross national
income due to its heavy reliance on exports
to the neglect of its domestic ma...
Along the way Chinese banks have been very
free in lending money, especially to high
ranking members of the Communist Part...
The suggestion of large pools of loans
invisible to the outside world is reminiscent of
the situation in Japan in the late...
Just as Japan seemed set to conquer the
world economically it went into economic
stagnation and deflation that lasted over...
This hidden Chinese economy of loans has
the potential to kill the Chinese economic
miracle, at least for the foreseeable ...
Another hidden Chinese economy issue is
the large number of empty buildings that
Chinese investors believe are repositorie...
When the Chinese real estate bubble bursts
many investors will find that the money that
they borrowed to buy real estate i...
Trying to Fix the
Hidden Chinese
Economy
http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-ec...
A major issue for foreign as well as domestic
investors is the accuracy of Chinese
economic data.

http://www.profitablein...
The many hidden loans in Japan were not
visible and were a rot at the core the
Japanese economic miracle.

http://www.prof...
Is this the case with a hidden Chinese
economy of bad loans, inflated housing
values and doctored economic figures?

http:...
Fundamental analysis can be misleading
even for investment in a China with lower
growth targets if the basic data is not
a...
In a democracy the government derives its
power and authority from the consent of the
governed.

http://www.profitableinve...
Chairman Mao, the founder of Communist
China, said that political power came from the
barrel of a gun.

http://www.profita...
Today the Communist elite in China are often
the main beneficiaries of the economic
miracle via preferred loans and
owners...
China has prospered because it has let up on
the strict controls of the early days.

http://www.profitableinvestingtips.co...
But it needs to maintain growth and a certain
level of prosperity in order to avoid civil
unrest without reverting to the ...
Thus the People’s Bank of China needs to
reduce the money supply without killing the
economic miracle.

http://www.profita...
In a sense only the folks on top of the ruling
pyramid in China know the whole story and
the hidden Chinese economy and ju...
Facts and Figures

http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
Here are some facts and figures regarding
how China ranks in the world of exports and
the world of gross domestic income.
...
Nation

Value of Exports (2012)

China

$ 2,057,000,000,000

United States

$ 1,564,000,000,000

Germany

$ 1,460,000,000,...
China leads everyone in the value of what
they export.

http://www.profitableinvestingtips.com/profitableinvesting-tips/hi...
Nation

Gross National Income

United States

$9,780,000,000,000.00

Japan

$4,520,000,000,000.00

Germany

$1,940,000,000...
These figures put China in sixth place for
total value of goods and services produced.

http://www.profitableinvestingtips...
This is because China’s economy is so
heavily tilted toward exports and not its
domestic markets.

http://www.profitablein...
Many believe that to fix the hidden Chinese
economy more money needs to be allotted to
small businesses and normal househo...
This is a difficult task for the Communists task
masters who always feel more comfortable
with huge mega projects which th...
In the end the hidden Chinese economy is a
threat to foreign investors, nations that supply
raw materials to China and Asi...
Hidden Chinese Economy
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Hidden Chinese Economy

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Hidden Chinese Economy

http://www.profitableinvestingtips.com/profitable-investing-tips/hidden-chinese-economy

China has been the wonder of the economic world over the last forty years. With growth rates often exceeding ten percent per year China has moved too first place in the world in value of exports. However, China ranks sixth in gross national income due to its heavy reliance on exports to the neglect of its domestic markets. Along the way Chinese banks have been very free in lending money, especially to high ranking members of the Communist Party and their friends and families. The suggestion of large pools of loans invisible to the outside world is reminiscent of the situation in Japan in the late 1980s. Just as Japan seemed set to conquer the world economically it went into economic stagnation and deflation that lasted over two decades and is just now emerging. This hidden Chinese economy of loans has the potential to kill the Chinese economic miracle, at least for the foreseeable future. Another hidden Chinese economy issue is the large number of empty buildings that Chinese investors believe are repositories of wealth. When the Chinese real estate bubble bursts many investors will find that the money that they borrowed to buy real estate is still due but that the value of the real estate they purchased is nowhere near what they owe.

Trying to Fix the Hidden Chinese Economy

The People’s Bank of China has been tightening up on its lending in an attempt to clean up loan portfolios without killing all economic growth. A major issue for foreign as well as domestic investors is the accuracy of Chinese economic data. The many hidden loans in Japan were not visible and were a rot at the core the Japanese economic miracle. Is this the case with a hidden Chinese economy of bad loans, inflated housing values and doctored economic figures? Fundamental analysis can be misleading even for investment in a China with lower growth targets if the basic data is not accurate. In a democracy the government derives its power and authority from the consent of the governed. Chairman Mao, the founder of Communist China, said that political power came from the barrel of a gun. Today the Communist elite in China are often the main beneficiaries of the economic miracle via preferred loans and ownership/management of businesses with preferential connections. China has prospered because it has let up on the strict controls of the early days. But it needs to maintain growth and a certain level of prosperity in order to avoid civil unrest without reverting to the gun barrel approach to power. Thus the People’s Bank of China needs to reduce the money supply without killing the economic miracle. In a sense only the folks on top of the ruling pyramid in China know the whole story and the hidden Chinese economy and just how dangerous things are at the moment.

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Transcript of "Hidden Chinese Economy"

  1. 1. Hidden Chinese Economy BY WWW.PROFITABLEINVESTINGTIPS.COM
  2. 2. China has been the wonder of the economic world over the last forty years. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  3. 3. With growth rates often exceeding ten percent per year China has moved too first place in the world in value of exports. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  4. 4. However, China ranks sixth in gross national income due to its heavy reliance on exports to the neglect of its domestic markets. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  5. 5. Along the way Chinese banks have been very free in lending money, especially to high ranking members of the Communist Party and their friends and families. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  6. 6. The suggestion of large pools of loans invisible to the outside world is reminiscent of the situation in Japan in the late 1980s. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  7. 7. Just as Japan seemed set to conquer the world economically it went into economic stagnation and deflation that lasted over two decades and is just now emerging. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  8. 8. This hidden Chinese economy of loans has the potential to kill the Chinese economic miracle, at least for the foreseeable future. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  9. 9. Another hidden Chinese economy issue is the large number of empty buildings that Chinese investors believe are repositories of wealth. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  10. 10. When the Chinese real estate bubble bursts many investors will find that the money that they borrowed to buy real estate is still due but that the value of the real estate they purchased is nowhere near what they owe. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  11. 11. Trying to Fix the Hidden Chinese Economy http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  12. 12. The People’s Bank of China has been tightening up on its lending in an attempt to clean up loan portfolios without killing all economic growth. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  13. 13. A major issue for foreign as well as domestic investors is the accuracy of Chinese economic data. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  14. 14. The many hidden loans in Japan were not visible and were a rot at the core the Japanese economic miracle. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  15. 15. Is this the case with a hidden Chinese economy of bad loans, inflated housing values and doctored economic figures? http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  16. 16. Fundamental analysis can be misleading even for investment in a China with lower growth targets if the basic data is not accurate. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  17. 17. In a democracy the government derives its power and authority from the consent of the governed. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  18. 18. Chairman Mao, the founder of Communist China, said that political power came from the barrel of a gun. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  19. 19. Today the Communist elite in China are often the main beneficiaries of the economic miracle via preferred loans and ownership/management of businesses with preferential connections. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  20. 20. China has prospered because it has let up on the strict controls of the early days. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  21. 21. But it needs to maintain growth and a certain level of prosperity in order to avoid civil unrest without reverting to the gun barrel approach to power. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  22. 22. Thus the People’s Bank of China needs to reduce the money supply without killing the economic miracle. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  23. 23. In a sense only the folks on top of the ruling pyramid in China know the whole story and the hidden Chinese economy and just how dangerous things are at the moment. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  24. 24. Facts and Figures http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  25. 25. Here are some facts and figures regarding how China ranks in the world of exports and the world of gross domestic income. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  26. 26. Nation Value of Exports (2012) China $ 2,057,000,000,000 United States $ 1,564,000,000,000 Germany $ 1,460,000,000,000 Japan $ 773,900,000,000 France $ 567,100,000,000 http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  27. 27. China leads everyone in the value of what they export. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  28. 28. Nation Gross National Income United States $9,780,000,000,000.00 Japan $4,520,000,000,000.00 Germany $1,940,000,000,000.00 United Kingdom $1,480,000,000,000.00 France $1,380,000,000,000.00 China $1,130,000,000,000.00 Italy $1,120,000,000,000.00 http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  29. 29. These figures put China in sixth place for total value of goods and services produced. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  30. 30. This is because China’s economy is so heavily tilted toward exports and not its domestic markets. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  31. 31. Many believe that to fix the hidden Chinese economy more money needs to be allotted to small businesses and normal households. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  32. 32. This is a difficult task for the Communists task masters who always feel more comfortable with huge mega projects which they can control and from which they can siphon profits. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy
  33. 33. In the end the hidden Chinese economy is a threat to foreign investors, nations that supply raw materials to China and Asian neighbors who will feel threatened by economic and social instability if the hidden Chinese economy implodes. http://www.profitableinvestingtips.com/profitableinvesting-tips/hidden-chinese-economy

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