New China Syndrome

maoThe Chinese are a bunch of commies. Just look at how they are handling the economic crisis. When their largest trading partner (us), suddenly announced a banking crisis, massive new unemployment, the loss of a third of stock market value and plans for massive borrowing to fund stimulus programs that would take years to recover and surely devalue its currency, what did they do? When they were faced with canceled contracts, factory closings, empty cargo ships and 20 million unemployed, how did they handle it? Well, they sure didn’t bailout Shiji Avenue.

They bailed out people – a purely communist idea if I ever heard one. Their program’s goal was to stimulate the economy and to create demand for factory capacity. To keep people employed. To keep them happy and healthy. To keep them spending. And, most of all, to keep them from overthrowing the government.

The Chinese are funding massive infrastructure programs – building roads, railroads and public housing – and Chinese actually use shovels and had them ready. They didn’t bail out banks. What they did was let the Chinese banks compete to finance the state programs, which kept the banks profitable. They didn’t send money to huge businesses to make up for imaginary losses, they sent money directly to individuals who did something totally expected: they spent it. Business didn’t shut down, because people where buying. Layoffs stopped. Factories reopened, shifted production to what their Chinese consumers wanted, and production increased 8.3% in March. Per capita disposable income is up. Real estate markets are improving. The Shanghai stock market is up 40%. Chinese auto sales rose 37% last month. And the Chinese GDP, which will slow from previous years when the US was buying, is expected to be 7-8%. The US GDP is currently down 6.29%. It’s a communist plot.

2 thoughts on “New China Syndrome

  1. Jane P

    If it weren’t so sad I would laugh. True, the new “commie plot” is taken straight from America’s former playbook.

    Reply
  2. sally wood

    To our “leaders”:

    It is said that you should keep your friends close and your enemies closer. Please pay attention and keep the Chinese very close indeed.

    Reply

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