I still think the uncertainty about China’s economy is the big economic story of the moment, and it appears the Biden Administration thinks so too. Bloomberg reported last week:
President Joe Biden blasted China’s economic problems as a “ticking time bomb” and referred to Communist Party leaders as “bad folks,” his latest barb against President Xi Jinping’s government even as his administration seeks to improve overall ties with Beijing.
In comments that included several major inaccuracies about the world’s second-largest economy, Biden said at a political fundraiser Thursday that China was in “trouble” because its growth has slowed and it had the “highest unemployment rate going.” He also blasted Xi’s signature Belt and Road Initiative as the “debt and noose,” because of the high levels of lending to developing economies associated with the global investment program.
Never mind our befuddled leader’s inaccuracies. This FT chart shows the Chinese concealing data:
Investment banker Kyle Bass comments on Twitter:
China’s REPORTED GDP ‘growth’ for 2022 was +2.9%. In a year where Chinese LNG demand was down 22%, their real estate market (which represents 33% of Chinese GDP) was in the midst of a collapse, literally welding Chinese citizens into their apartment buildings, and the WeChat payments flowing through their system were down over 20% yoy. In 2023, YOUTH UNEMPLOYMENT is somewhere between 20% and 50%, 48 local governments are in some stage of default on their debt (LGFV debt is approximately $10trillion or just under 60% of GDP), the majority of Chinese property developers are in default of their dollar bonds (71% are in default of over $180 billion in bonds), Xi has ordered all corporate and macro level data to be severed to the West, and the Chinese Government is reporting +5.5% GDP ‘GROWTH’?! Reputable economists don’t believe these numbers from the CPC and President Biden has much better intelligence sources than you do. This Bloomberg piece you reference here was written by an organization whose largest growth area for its business has been China over the past decade and who is forced to have Chinese Communist Party Overseers in its newsroom to inspect ‘news’ stories written about China. Bloomberg is not allowed to write articles overly critical of Xi, the Chinese economy, or the Chinese Communist Party or it will lose its ability to operate in the Middling Kingdom like it did for the Bo Xilaj series of articles in 2013. Mike Bloomberg had to go to China and promise them he wouldn’t upset the Party again and BEG THEM to allow Bloomberg back into China. You know damn well that the Chinese government lies when the numbers don’t suit them.
UPDATE—The Washington Post is on this story line too:
Hu, who governed 2003-2013, told Bush his biggest worry was the need to create 25 million new jobs per year.
“I found his answer fascinating. It was honest. It showed he worried about the impact of disaffected, unemployed masses. It explained his government’s policies in resource-rich places like Iran and Africa,” Bush wrote. “And it was a signal that he was a practical leader focused inward, not an ideologue likely to stir up trouble abroad.” . . .
Hu’s comment felt more relevant this week after President Biden made a lot of global headlines last week when he said China’s mounting economic troubles make America’s biggest global rival “a ticking time bomb.”
Beijing got upset. But Biden was right that the Asian giant’s domestic problems bear watching — a downturn there would be felt globally in unpredictable ways, and could shape Beijing’s decision-making on foreign policy.Biden: “China finds itself in a position where it has the highest unemployment rate going. It’s in a position where the number of people who are of retirement age is larger than the number of people of working age. So, they got some problems. That’s not good because when bad folks have problems, they do bad things.”
Move over Ukraine. Looks like our foreign policy geniuses have our next war on the way.