Xi Jinping gambles on the Chinese financial crisis to move forward with difficult reforms

Chinese President Xi Jinping seems to be heading for a self-imposed economic boom, as one of China’s most prosperous nations is living near bankruptcy and manufacturers are struggling to cope with power shortages across the country.

Aside from the short-term change, experts and government advisers expect Xi to take advantage of what he says is an “opportunity” to continue with the complex transformation.

If it wins, it will be the latest in a long process of political rivalry – from the removal of the presidency to its quest for independence. “Common Pleasure” – which has made him the most dangerous leader in China since Mao Zedong. It has also suspended him for a third-place seat at a Chinese communist party conference later this year.

A well-known economy is particularly dangerous, as Xi’s determination to repurchase prices and reduce inflation could hurt the world’s second-largest economy.

“Xi is preparing for the conference,” said Henry Gao, a Chinese scholar and professor of law at Singapore Management University. “He wants people to remember him for many things, but especially for his well-being. [His predecessors] managed to navigate China on a fast-growing economy but it did not really help things to go smoothly. ”

Next week the National Bureau of Statistics will release its forecast for quarterly economic growth and other sectors of the economy. This date will provide a good indication of what can happen from problems in Evergrande, China’s second-largest producer with debts of more than $ 300bn, as well as power shortages caused by rising coal prices and new environmental problems.

As a result, many forecasters are reviving their annual Chinese financial statements. But many predict that a year-round economy will be more successful than a government employee Growth rate of 6 percent beyond 2020.

At a party politburo meeting in April, Xi said China’s economic recovery from the Covid-19 epidemic provided “significant opportunities” for tackling the financial crisis, especially in areas with high debt such as real estate. It was also an opportunity to pursue natural aspirations such as achieving better air by 2030 and political neutrality by 2060.

Rosealea Yao, a surveyor at Gavekal Dragonomics in Beijing, said that since August China’s exports to the stock were close to 1.8bn sq m a year – compared to an average of 1.7bn sq. M from 2017 to 2019. Sales and prices that threaten the economy of Xi, officials were eager to do something dangerous with Evergrande when it began to lose money to both sellers and sellers in September.

Many analysts, however, warn that the Evergrande debt crisis could have a greater impact on China’s economy than Xi and his financial advisers realize as they try to convince retailers that Beijing will not stop trying to punish a share that claims about 30 percent of total output.

The yields offered by Chinese developers are rising and the demand for additional loans could fall, which puts them at risk of the Evergrande vortex.

“They want to threaten the market as a means of curbing moral decay,” said Michael Pettis, a Chinese economist at Peking University. “Evergrande is at risk of extinction because people are changing their systems to protect themselves, which is understandable. But when people do this systematically, it only adds fuel and makes things worse.”

Evergrande city in Wuhan

Researchers have warned that Evergrande’s debt crisis could affect China’s economy more than Beijing realizes © Getty

A Chinese government adviser, who asked not to be named, said the recent sale of goods by Evergrande raising money were molehills based on the sum of all his debts, about $ 305bn. If pushed too quickly, the group could be forced to sell the central bank.

“The sale of the Evergrande reservoir fire could lower property prices in many parts of the country, which could be dangerous,” the adviser said. In that case, he added, “the only solution would be to gradually eliminate the whole real estate sector”.

The power outages that have taken place in China over the past few weeks are examples of how positive thinking can have unintended consequences.

Some of the results are based on the reduction in the production of components that are struggling to achieve the efficiency of power generation by the end of the year. Plants in some areas have been affected by a shortage of coal, rising prices for coal and electricity costs, which means they only generate electricity. On Monday The future of Chinese coal reached its climax after a major coal-mining area was hit by a flood.

The owner of a plastic factory in eastern Jiangsu province, who asked not to be named, said he had received the final notification of power cuts that began in mid-September. “There were no future ideas from the government,” he said. “Businesses need to plan for the future.”

Late last week, Xi’s supervisors tried to fix this speeding up the production of coal and allow prices to charge more for their electricity. But short-term acceptance will not prevent Beijing from pursuing its long-term environmental goals.

“We understand and support the government’s commitment to the environment,” said the factory owner. “The government is seeing a bigger picture than we are and it has targets to reduce emissions. But sudden self-harm causes a lot of pain.”

Additional reports of Xinning Liu in Beijing

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