- Asian Trippers
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by Jin Li Hai
China hasn’t been having such a good time lately. Their GDP has dropped 4% (the most it has in the last 2 years), their “Zero Covid” policy isn’t really doing wonders for the economy; foreign investors are getting fed up with ludicrous policies and government involvement; and recently; some people cannot withdraw money from their accounts. The response from the state owned banks said that “ savings of depositors in their branch are ‘investment products’ and cannot be withdrawn.” (Ndtv.com)
2 days ago, protesters gathered outside of the Henan Branch of The Bank of China were greeted by tanks, bringing back memories of 1989 . The government asked for patience, as they are investigating how an investment group had taken over the bank through “”internal and external collusion” and “illegally” attracted depositors.” (https://www.ndtv.com/world-news/video-shows-tanks-protecting-crisis-hit-banks-in-china-internet-says-history-repeats-itself-3175812)
And to quote South Park: “If you think that’s bad…” with (US $6 billion) in deposits having disappeared and people demanding access to their frozen savings…homeowners who put their money into property development firms like Evergrande are starting to stop their mortgage payments, seeing as most of them aren’t even finished yet.
Things like these have all made more and more Chinese citizens start to lose faith in their government; who, while promising that they will attempt to bail out the property firms, are seeing more and more people refusing to invest in one of China’s biggest financial assets; causing a “negative feedback loop” which will result in bank stocks going down and the housing prices to fall lower, causing China’s GDP to lessen even more.
China’s foreign policy isn’t helping either. As a result of their firm stance on not budging to foreign pressure and sticking to their guns; India and Australia have stopped being their friends. America is also considering increasing economic sanctions for aiding Russia and supporting Burma’s oppressive regime: (https://www.theepochtimes.com/investing-in-china-is-becoming-more-risky-for-us-and-foreign-companies_4606205.html?welcomeuser=1)
All of that, coupled with the U.S Federal Reserve increasing borrowing costs and Xi Jinping’s tightening of capital outflows, resulting in foreign owned companies finding it more difficult to buy raw materials and sending money or employees back (due to extreme COVID policies); one can almost see how the monstrous bubble that China had been inflating is getting fit to burst.
But China remains steadfast in its resolve to never yield and lose face. The CCP government still refuses to import foreign vaccines; refuses to “just live with COVID”; refuses to make it easy for foreign workers, and still continue to de-platform people they feel are bad examples; maintaining social credit scores, have robot dogs roaming the streets “barking orders” and are getting closer and closer to AI judges that will determine whether someone is guilty or not in court.
With this new groundbreaking technology:
- “AI suggests new law, drafts legal documents, and alters ‘perceived human error”
and :
- “Judges must consult the AI on every case, and if they reject the machine’s recommendation then they must submit a written explanation”
And just to show you there is no way for the CCP to stop going as hard as they can to “encourage” everyone to be good people; the government are using engineers to study humans and AI to create a “mind reading device” that can detect indecent images on the internet or even in your mind. (https://www.scmp.com/news/china/science/article/3182087/mind-reading-device-detect-porn-could-speed-chinas-policing)
Now that would probably be bad for your social credit score.
In case you were wondering how it works:
“The device, which could speed up the work of censors trying to spot indecent images on the Chinese internet, is worn on the head by the subject and can pick up a spike in the brainwaves triggered by explicit content, according to the researchers. Fifteen male university students aged between 20 and 25 volunteered to wear the item while in front of a computer screen.”
But with all of that taken into account; China is still expected to keep growing, and is projected to be the largest economic superpower; and according to the Chinese media:
“ saving lives is worth slower real GDP growth.
Beyond 2022, the Chinese economy should be able to grow at an average annual rate of 5.5 per cent for at least another decade. There are, however, a number of uncertainties.”
Ok, we get it. They have huge supply and demand incentives. I myself will go on Shopee and get anything I can think of for a cheap price. Chinese live a very consumer based lifestyle; they have strong work ethic and are able to comfortably sacrifice free time for money, unlike the American’s whose are still recovering from the Big Resignation of 2021.
Even now, with all the protests going on and people refusing to pay the banks in the rural villages, that offered “ higher interest rates and signing up depositors online from far and wide” in order to compete with big banks, now refusing to allow withdraws; and the government waiting with big tanks in case people get a little too upset…
The government still maintains that all is well in their attempt of rebooting the economy and maintain a Zero-Covid policy to show us all how good they are.
“All is well, nothing to see here!”
We all wonder how much longer this bubble and facade is going to last before people get too fed up with it. The banks in the end issued a statement that : “To ease anger from the banking scandal, Henan’s provincial banking and insurance regulator said that money would begin to be released.
“Advance payment will be released to customers with a combined amount of less than 50,000-yuan savings in one institution,” it said.
“If the combined amount of a single institution is more than 50,000 yuan, the advance payment will be made successively, and the advance payment arrangement will be announced separately.” (time)
That has come as a big blow to the faith that the Chinese have in their banks and the digital Yuan. Meanwhile, on the front of property; which we should remember that “60% of the total assets owned by urban Chinese households were in commercial and residential property.” (https://time.com/6198624/china-mortgage-boycotts/)
If more and more money from those mortgage payments stop flowing in, and giving those mega real estate companies liquid cash, the gears and levers stop moving, and as we all remember from 2008; a mortgage recession can have big impacts not only for the country, but for the global economy as well.
So now what? Congratulations; you just brushed up on your financial knowledge of China, but now what can you do about it, or prepare? Maybe invest in Chinese stocks or companies. Don’t do any leverage trading or put all of your eggs in one basket with a stock or crypto. Maybe just save up for a bit, and invest in your talent because we might be stuck doing our jobs a little while longer before the global economy gets rosy and inflation goes down.
As we see by the rising of temperatures, maybe start investing in a good A/C or learn how to repair or clean them as we adapt to the climate changing world of tomorrow. Maybe just get high and listen to music, knowing that while the world and its prices are changing, you can at least know why it happens, where it comes from, and be happy that good music still exists.
Stay high and stay lifted
Jin Li Hai
