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China is suffering from a crisis of confidence and being over leveraged
--> Real Estate defaults
--> Mutual fund/unit trust are unable to make payouts due to many of their investments tied to real estate/construction
--> Government vehicle funds are in zombie states as national projects were constructed at high cost and quickly since 2013 but revenue collected was low (example is China's High speed rail project because of the low fare charged to the people, the project is in constant operating loss). HSR project is now forced to operate within rational projections as part of the austerity
The only solution in my view is to charge the China citizens much higher for the public service they are utilising, while at the meantime wipe off their savings for their funds tied to fund investments.
Its going to be a major reset but this is due to policy missteps by Xi JinPing goverment since he took office. It is definitely a lost decade for China now with expected defaults and the citizens losing part of their savings
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18-08-2023, 09:16 AM
(This post was last modified: 18-08-2023, 09:24 AM by Big Toe.)
China has some tools it can use.
ie Corporate and personal income tax collection has always been very loose and lax
Collection of these taxes can be more stringent and more well enforced especially for the SMEs and personal income taxes.
China is a strange place where they pay very close attention to certain issues and less on others. Their list of priorities is somewhat different from democratic/free market economies. Citizens are somewhat more "respectful" towards their leaders and more tolerant.
From a market perspective Xi's gov may have stumbled a bit. From a political perspective, how he managed to solidify his position, he did extraordinarily well.
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Yes. The closest resembelance is to Mao Zedong.
President Mao is loved by the people even though tens of millions died due to famine and lack of jobs under his grand plan "Great Leap Forward" which had many policy missteps.
Similarly, President Xi has a similar grand plan called "Common Prosperity". I hope it does not fall in the same missteps of killing tens of million of Chinese Citizens. Currently lack of jobs is appearing
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