China's central bank in Beijing cut the reserve requirement ratio for its banks on Nov. 30 for the first time in nearly three years to ease credit strains and shore up activity in the world's second-largest economy. /Reuters/Soo Hoo Zheyang

陈凯博客： www.kaichenblog.blogspot.com

China was going to save the global economy? Guess again
中国经济濒临崩盘

http://www.worldnewstribune.com/2011/12/...my-guess-again/

Sol W. Sanders

Creeping up on the outer edges of Wall Street soothsayers’ economic crystal ball, until now dominated by American and Euro crises, is growing concern about China.

The inane idea China [and India, which is also in trouble] would somehow rescue the world economy is now, finally, dismissed by the pundits — without apologies. How a largely export-led, mercantilist economy was to save the world with its principle markets in the U.S. and the EU winnowing down was never explained. Continued wishful references to Chinese leadership’s equally improbable promises to boost domestic consumption are also falling away.

There is, in fact, a growing consensus the Chinese economy is spiraling down. One respected Hong Kong economist, Ms. Wang Tao of UBS, is predicting a gross domestic growth [GDP] rate toward 7 percent before year’s end. That’s below the red line 8 percent long considered by the double-domes as the minimum to satisfy jobs for China’s growing population.

Soon we can hope to hear an end to those straight-line projections — so wrong two decades ago in Japan predictions — which take China’s current world No. 2 GDP to soaring heights. Indeed, China is the classic example of inadequacies of GDP as an economic barometer. Even assuming official figures are reliable — which is a far stretch — China’s GDP has inflated with vast over expansion of infrastructure and massive corruption indicating enormous activity but not necessarily a basis for continued stability and growth. [Remember Euroland’s GDP/consumption figures before the fall!] Nor do we have more than a notional figure for huge military outlays.

Granted, some of us who have been predicting a China crash for years, arguing its miraculous transformation was jerrybuilt. But we have always said what would trip the fall, when, and how the Chinese would cope with it, is unpredictable — as so many things in life. Some full-time observers are now turning to the banking structure as chief concern. Whether you look at inadequacies of Communist Party decision makers in their see-saw battle to maintain maximum growth but head off any hint of inflation, a traditional Chinese destroyer of dynasties, the outlook is grim.

Larry Lang, a Hong Kong TV personality and Chinese University professor of finance, recently labeled provincial finances as “China’s many Greeces”. Beijing’s writ — as an old proverb goes — ends no longer at the village gate but increasingly at the provincial capital where regional authorities defy the center, desperate to meet growing resources demands.

Local politicos have wheedled, persuaded, bribed and threatened local government banks into credit far beyond their capacity to repay. Add that to the huge stock of non-performing loans banks give their Party buddies in the huge inefficient government companies and you have what could be the mother of all financial fiascos.

Just as politics does not end at the banks’ doors, the Communist Party is moving into a generational leadership succession year. In theory, the new president and prime minister have been anointed. But there is a lot of shin-kicking with the usual Communist turn to so-called ideological arguments masking personality, regional and purely economic interests.

A kind of neo-Maoism has surfaced. And it could take on new life as economic problems deepen because there has always been a strong Party constituency for preserving Soviet controls, planning and government ownership. Never mind that the fabled Chinese entrepreneurial spirit has taken hold with the partial liberalization of the past two decades. But much of this private sector with its disproportionately higher productivity was exports now hit hard with the downturn in the U.S. and Europe.

This has collapsed thousands of private businesses, particularly in South China’s clothing and gizmo assembly operations, leading to dramatic literal disappearances of owners and managers and growing unemployment. This, in turn, has fed already escalating unrest; Beijing has stopped reporting even the very suspect official figures.

It’s early on, of course, to predict this would develop into the kind of provincial disintegration bringing down virtually every China ruling dynasty through its long history. Still….

Meanwhile, China’s drop in demand for raw materials is already hitting world commodity markets — iron ore, for example, and soon to be coal and soya. That will have its effects on the overseas suppliers from Angola to Brazil to Australia [which has already seen a 10 percent drop in its high-flying dollar of a few weeks ago.]

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Sol W. Sanders, (solsanders@cox.net), writes the ‘Follow the Money’ column for The Washington Times on the convergence of international politics, business and economics. He is also a contributing editor for WorldTribune.com and East-Asia-Intel.com.

Chinese Admiral Threatens World War to Protect Iran
中共军方威胁世界大战保卫伊朗

Created: Dec 07 2011

Iranian President Mahmoud Ahmadinejad gives a speech to mark 'Iran Day' during a visit to the World Expo in Shanghai on June 11, 2010. (AFP/Getty Images)

By Matthew Robertson
Epoch Times Staff

As the United States and other nations grapple with how best to stop Iran from acquiring a nuclear weapon, a high-ranking Chinese military official has raised the stakes considerably on any possible military action.

On Dec. 4, according to a report in Press TV, a news network owned by the Iranian government, Chinese rear admiral and prominent military commentator Zhang Zhaozhong said, “China will not hesitate to protect Iran even with a third world war.”

It is not clear when the statement was made or in what context. Once reported, the statement went viral in China and elsewhere.

Apart from being a rear admiral in the Chinese navy, Zhang is the director of the National Defense University Military Logistics and Equipment Department. He maintains nationalistic military blogs that receive millions of viewers and is also well known as a commentator who appears regularly on the state-run China Central Television (CCTV). In 2006 he began hosting a CCTV-7 program called “Defense Review Week,” according to a research report by the Open Source Center. Efforts to reach Zhang were unsuccessful.

Zhang has expressed concerns about a war centered on Iran in the past.

In his book, “The Next War,” published in 2009, Zhang predicted that Iran is likely to be the target of the next war. In Zhang’s view, though the United States and Iran may have diplomatic negotiations, it is impossible for Iran to give up uranium enrichment and its nuclear program.

On a CCTV program on Nov. 8 Zhang said that the countdown for an Iran war has already started. He said that if the forthcoming International Atomic Energy Agency (IAEA) report on Iran’s nuclear program concluded that Iran is seeking to develop nuclear weapons, that may trigger a new round of sanctions on Iran or even lead to military action.

On that program Zhang referred to an article in Israel’s Jerusalem Post, which suggested that Russia is only a superficial supporter of Iran, while China is Iran’s real pillar. Zhang said that China is even willing to open up a land passage to Pakistan in order to aid Iran directly.

Iran has important strategic value for China. China has a rapidly growing demand for oil and imports 10 percent of its crude oil from Iran, which is China’s third largest supplier, according to Reuters.

China is Iran’s biggest crude oil buyer, and Iran needs all the friends it can get. As the controversy over Iran’s nuclear weapons program has grown it has become increasingly isolated, making its relation to China all the more important to Iran’s rulers.

The IAEA report, which was released on Nov. 8, prompted the IAEA Board of Governors to express “deep and increasing concern about the unresolved issues regarding the Iranian nuclear program, including those which need to be clarified to exclude the existence of possible military dimensions.”

The United States, the European Union, and Canada have since imposed tough, new sanctions aimed at crippling Iran’s petroleum industry. In the last few weeks mysterious explosions have struck an Iranian missile development site and a uranium conversion facility, prompting the Israeli newspaper Haaretz in a headline to proclaim “The War Against Iran’s Nuclear Program Has Already Begun.”

Joseph A. Bosco, a national security consultant and former China country desk officer in the office of the secretary of defense, said he was disturbed by Zhang’s remarks but not surprised.

Bosco said it was consistent with previous outlandish statements made by Chinese military officials, and also consistent with the Chinese regime’s support for Iran.

“China has protected Iran as it has other countries who are opposed to the United States,” he said in a telephone interview.

According to Bosco, the thinking in China is, “The enemy of my enemy is my friend.”

Bosco argues that the fact that in at least one case a general was promoted after making a saber-rattling statement adds significance, if not the official imprimatur, to such public rhetoric.

“If an American General made such statements, he would not long retain his position,” he said.

In 1995 the Chinese Communist Party (CCP) fired missiles toward Taiwan to protest a U.S. visit by Taiwan’s president; the United States sent aircraft carriers to the region in response.

In that context, Chinese Gen. Xiong Guangkai told Chas Freeman, who was previously an assistant secretary of defense in the United States Department of Defense, that China would attack the United States—possibly with nuclear weapons—if a war over Taiwan broke out.

“In the end you care more about Los Angeles than you do about Taipei,” Freeman later quoted Xiong saying. Freeman was not available for comment.

In January 1996 Xiong Guangkai was promoted to assistant chief of staff of the People’s Liberation Army (PLA), according to his official vita.

Zhu Chenghu, a major general in the People’s Liberation Army and dean of the Defense Affairs Institute for China’s National Defense University of the People’s Liberation Army, has also made outlandish threats.

In 2005 he told a Wall Street Journal reporter, “If the Americans draw their missiles and position-guided ammunition on to the target zone on China’s territory, I think we will have to respond with nuclear weapons.”

He added that the Chinese “will prepare ourselves for the destruction of all of the cities east of Xi’an. Of course the Americans will have to be prepared that hundreds … of cities will be destroyed by the Chinese.”

Zhu kept his post in the PLA and at the National Defense University, though he later received an official light reprimand.

The warlike rhetoric of Zhang, the defender of Iran, has found some skepticism on China’s Internet.

One netizen wrote in a blog post, whoever gets support from Gen. Zhang ends up with bad luck.

Another netizen commented, “If this is true, Iran is in danger. … Our country should pledge not to use Admiral Zhang first.”

Beijing braces for mass unrest as Hu warns economy faces ‘grim outlook’ in 2012
中国面临2012年社会大动荡

Special to WorldTribune.com

By Willy Lam, East-Asia-Intel.com

Things are not looking favorable for the world’s second-largest economy as the Chinese Communist Party (CCP) leadership takes steps to ensure enough economic growth in 2012 to head off massive social unrest.

Residents look on as riot police patrol on a street in the township of Xintang in Zengcheng near the southern Chinese city of Guangzhou on June 13. / Reuters

The Central Economic Work Meeting (CEWM), which concluded in Beijing on Dec. 14, confirmed earlier speculation that the leadership was reversing the tight-money policy of the past two years in the interest of “guaranteeing steady growth.”

A severe-looking President Hu Jintao announced at the meeting that his administration anticipated “an extremely grim and complicated” global economic situation, which could deal a big blow to Chinese exports.

Since the global financial crisis erupted in late 2008, Beijing has mainly relied on government injections into infrastructure projects — and a highly inflationary real-estate market — to maintain a 9 percent growth rate.