China Economic Meltdown in 2013

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China Faces Economic Meltdown in 2013, Says State Researcher

By Gao Zitan
Epoch Times Staff

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The designers work at the design center of Babei Group Co., Ltd on July 3, 2012, in Zhejiang Province, China. An economics researcher in China’s State Council predicts an economic meltdown in the country next year.(Feng Li/Getty Images)

An economics researcher in China’s State Council, the equivalent of the Chinese regime’s cabinet, predicts an economic meltdown in the country next year. His remarks, which were made almost a year ago, were given renewed attention recently as China’s economy actually begins to slow down and his predictions start to look not far off the mark.

Li Zuojun, a researcher with the National Development and Research Center of the State Council, delivered a speech on Sept. 17, 2011 titled,“Economic Crisis Will Befall China in 2013.” The speech was presented at an internal meeting of the Changsha Alumni Organization of Huazhong University of Science and Technology, according to Deutsche Welle.

Recently the speech has spread widely on China’s Internet.

An Aug. 23 post on Weibo, China’s largest social media site, was forwarded more than 9,000 times. The information was also widely reported by mainland media portals, including Sohu and Sina.

In summary, Li noted that the bankruptcies of small and medium-sized companies, banks, and local governments are all signs of a nationwide economic crisis.

Li gave four reasons for his prediction:

Economic

A bursting real estate bubble and the worsening local debt crises are two causes Li attributes to a potential economic meltdown.

He reasons that the overall economic downturn led to financial hardship for small and medium-sized companies, which subsequently resulted in reduced industrial and commercial tax revenues. Local governments suffered from reduced revenues due to the depressed real estate industry.

Nevertheless, local governments are under a lot of pressure to keep spending more money on items such as national defense, local infrastructure, housing construction and social insurance policies, improvement of hydraulic structures, and, most important of all,“maintaining social stability.”

At the same time, maturity of local debts is adding further pressure and forcing some local governments into bankruptcy. This will inevitably lead to banks also declaring bankruptcy, and debts being passed on to Chinese citizens. As a result, Li predicts a full-blown economic crisis is imminent.

Hot Money

China’s economy is slowing down while the United States is experiencing an economic recovery, therefore large sums of international hot money will flow out of China. This drain will also contribute to an economic implosion, he says.

Political

China’s 2013 leadership transition brings new leaders to the helm that might not be so anxious to address China’s economic woes. Li thinks they won’t expose any of the past problems until three to five months after they take their positions. So, the most likely recognition of an economic collapse, according to Li’s estimation, is July or August of 2013.

“Following the economic bubble bursting, there will be a subsequent period of suffering. But for the new leaders, this is nothing bad, since they are not to blame for the suffering,” Li said.

Furthermore,“With the economic bubble bursting, the new leadership can adopt practical approaches.… New political achievements will be gained more easily, since the starting point is comparatively low.”

Cycles

The valleys of short-term, mid-term, and long-term cycles converge in 2013, Li said.

A short-term cycle spans three or five years. Currently, this cycle is moving downwards and will reach bottom within the next two years, Li said.

A mid-term cycle spans about nine or ten years. According to Li, mid-term cycles in China occurred almost every ten years, in 1949, 1957, 1966, 1976, 1989, and 1998. Li said it has been over a decade since 1998, and the cycle should be around the corner. Initially, this cycle should have arrived in 2008 or 2009. Economic policies at that time delayed the cycle’s valley, but it shouldn’t be delayed for too much longer, he said.

There is also a long-term cycle, which spans 60 years, Li said, giving his speech a traditional Chinese inflection with a reference to the I-Ching, also known as the Book of Changes, a classic Chinese text on divination. From Li’s estimation this cycle is also approaching.

With the economic crisis, social problems will also result. The current intensification of “mass incidents,” or large, often violent protests, can be seen as a forewarning of future turbulence, he said.

Other economists agreed with Li’s presentation.

Mao Yushi, a well-known Chinese economist who advocates free market principles, said in an interview with Deutsche Welle that China has serious economic problems and that “any sudden change” is possible. Economic problems will lead to a plethora of social problems, he said.

Dong Fan, a Chinese economist and professor at a prominent university in Beijing, said he admires Li’s courage to speak.

“The crisis [in China] has long been taking place from the western perspective,” Dong said.“It is only that it has been successfully covered up by the current systems, and the report in April showing an upswing of real estate transactions has made the rather severe economic situation look more favorable.”

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The epoch times is a Falun Dafa run, anti-China propaganda publication.

AZN wrote:

The epoch times is a Falun Dafa run, anti-China propaganda publication.

I guess Gu Kailan were Falun Gong too, that she poisoned the Briton ?

lol .......... LOL

China's steel sector in 'extreme depression'

by: MICHAEL SAINSBURY, CHINA CORRESPONDENT From: The Australian September 05, 2012 12:00AM

CHINA'S largest steelmaking province says the sector has fallen into "extreme depression" and is unlikely to recover for some time as the country's steel mills undergo a long-awaited restructure.

The comments come as iron ore stock piles hit "historic highs", with Beijing-based analysts predicting that low prices will continue for many months as Chinese steel mills cut production and struggle with industry overcapacity.

"The steel industry in Hebei has fallen into extreme depression," the Metallurgy Association of Hebei Province said.

"Orders to steel factories are dropping sharply and the stock of products keeps increasing with operational pressure on steel factories growing further."

Wang Dayong, secretary-general of the association, said the lower prices and profits would not change in a short time while the environment for China mills to restructure was still developing.

China has steel capacity of about 850 million tonnes, much of it created during the massive government stimulus of 2009-10. But its mills produced only 680 million tonnes of steel last year and are forecast to produce 700 million to 720 million tonnes this year.

But the general economic malaise and the choking off of demand in the real estate sector is starting to bite.

"Though the central government has issued certain stimulus with financial and monetary policies, the slump in demand has not changed," the association said.

"Orders for August have dropped 13.3 per cent from the previous month and the steel price has decreased within a large range ... so more steel mills have put their furnaces into maintenance. Steel factories are reducing their ore stockpiles. The purchase of ores is being reduced, from both domestic producers and abroad."

This slackening in demand has combined with an increased supply of seaborne iron ore from Australia and Brazil.

"We estimate there are about 98 million tonnes of iron ore stockpiled at Chinese ports and warehouses of mills, 5 to 10 per cent more than same period last year, and highest in history," Zeng Jiesheng, analyst at Mysteel.com , told The Australian. "This means iron ore pricing in the long run will be running at relatively low level."

MySteel.com estimates iron ore prices to fluctuate between $US80 and $US130 a tonne.

"Some predict the low price will run to 2014 or 2015, and we think the low prices will last at least one or two years," Mr Zeng said.

"EXTREME DEPRESSION" is soon to be the fate of the entire distorted CCP China economy!

AZN wrote:

The epoch times is a Falun Dafa run, anti-China propaganda publication.

The Epoch Times had been known to publish the truth about China. And nothing has changed about Epoch Times.

Yup, everyone knows Epoch Times is run by that evil sect, Falun Dafa.

Filmalay wrote:

<quoted text>
The Epoch Times had been known to publish the truth about China. And nothing has changed about Epoch Times.

It publishes "truth" that sounds good to the ears of China's enemies.

Commie SciFi wrote:

<quoted text>
I guess Gu Kailan were Falun Gong too, that she poisoned the Briton ?
lol .......... LOL

I am not trying to defend that stupid woman.

But that briton was a blackmailing son of a b---h.

AZN wrote:

<quoted text>I am not trying to defend that stupid woman.
But that briton was a blackmailing son of a b---h.

That's why it's dead.

THE WORLD KNOWS wrote:

Yup, everyone knows Epoch Times is run by that evil sect, Falun Dafa.

Evil sect in the eyes and ears of the CCP-Politburos.

AZN wrote:

<quoted text>It publishes "truth" that sounds good to the ears of China's enemies.

That's the plan, and have to brace ourselves for the sake of the truth and nothing but the truth, so help the damn CCP-Politburos.

They better hide underneath the Great Wall of China before they get crushed.

Mirolyuba wrote:

China's steel sector in 'extreme depression'
by: MICHAEL SAINSBURY, CHINA CORRESPONDENT From: The Australian September 05, 2012 12:00AM
CHINA'S largest steelmaking province says the sector has fallen into "extreme depression" and is unlikely to recover for some time as the country's steel mills undergo a long-awaited restructure.
The comments come as iron ore stock piles hit "historic highs", with Beijing-based analysts predicting that low prices will continue for many months as Chinese steel mills cut production and struggle with industry overcapacity.
"The steel industry in Hebei has fallen into extreme depression," the Metallurgy Association of Hebei Province said.
"Orders to steel factories are dropping sharply and the stock of products keeps increasing with operational pressure on steel factories growing further."
Wang Dayong, secretary-general of the association, said the lower prices and profits would not change in a short time while the environment for China mills to restructure was still developing.
China has steel capacity of about 850 million tonnes, much of it created during the massive government stimulus of 2009-10. But its mills produced only 680 million tonnes of steel last year and are forecast to produce 700 million to 720 million tonnes this year.
But the general economic malaise and the choking off of demand in the real estate sector is starting to bite.
"Though the central government has issued certain stimulus with financial and monetary policies, the slump in demand has not changed," the association said.
"Orders for August have dropped 13.3 per cent from the previous month and the steel price has decreased within a large range ... so more steel mills have put their furnaces into maintenance. Steel factories are reducing their ore stockpiles. The purchase of ores is being reduced, from both domestic producers and abroad."
This slackening in demand has combined with an increased supply of seaborne iron ore from Australia and Brazil.
"We estimate there are about 98 million tonnes of iron ore stockpiled at Chinese ports and warehouses of mills, 5 to 10 per cent more than same period last year, and highest in history," Zeng Jiesheng, analyst at Mysteel.com , told The Australian. "This means iron ore pricing in the long run will be running at relatively low level."
MySteel.com estimates iron ore prices to fluctuate between $US80 and $US130 a tonne.
"Some predict the low price will run to 2014 or 2015, and we think the low prices will last at least one or two years," Mr Zeng said.

This is the effect of the trade war between the U.S. and China due to China dumping their cheap subsidized steel products to the U.S.A.

Dumping of cheap chinese products to the U.S. is not going to work. It is not because the U.S. owed Chinese money doesn't mean that U.S. allows chinese products to flow freely like water without being checked. The U.S. A. have to protect American jobs somehow, otherwise the chinks will be calling the shots worldwide.

Slap a 1000 % tariff to all chink products to U.S. A. to protect American jobs.

Filmalay wrote:

<quoted text>
This is the effect of the trade war between the U.S. and China due to China dumping their cheap subsidized steel products to the U.S.A.
Dumping of cheap chinese products to the U.S. is not going to work. It is not because the U.S. owed Chinese money doesn't mean that U.S. allows chinese products to flow freely like water without being checked. The U.S. A. have to protect American jobs somehow, otherwise the chinks will be calling the shots worldwide.
Slap a 1000 % tariff to all chink products to U.S. A. to protect American jobs.

Look a Filipino APE speaks

RESISTANCE IS FUTILE wrote:

<quoted text>
Look a Filipino APE speaks

LOOK! A yellow CHINK MELTING ECONOMICALLY speaks~!

I'm accepting DONATIONS for the mainland Chinamen who's economy has no where else to go but down, and the Government, on it's way to self destruction.

(Cev donates 1 peso for the soon to be POOR Chinamen.)

China Economy is the strongest in the world today.
It has a monetary reserve of three billion US Dollar. It has other reserves in form of Gold, Steel and Iron, Platinum and many more.
Don't forget, the Chinese Diasporas in various countries in the world numbering more than forty million is a valuable asset for China's commerce.
China has purchased a lot of mines throughout the world and is still doing it. The government of China has transformed the huge population of 1.3 billion people to be the most productive work force among nations. So, the Analyzer who predicted the collapse of China Economy is having wet dreams.
Before commenting wrongly about China, it is better they look at the rising water under his leg which will soon drown them.
Perhaps they never wattch TV, listen to the radio, reading newspaper, or browsing in the Internet.
These stupid folks are telling lies to themselves and hoping others will believe them.

Hoan Li wrote:

China Economy is the strongest in the world today.
It has a monetary reserve of three billion US Dollar. It has other reserves in form of Gold, Steel and Iron, Platinum and many more.
Don't forget, the Chinese Diasporas in various countries in the world numbering more than forty million is a valuable asset for China's commerce.
China has purchased a lot of mines throughout the world and is still doing it. The government of China has transformed the huge population of 1.3 billion people to be the most productive work force among nations. So, the Analyzer who predicted the collapse of China Economy is having wet dreams.
Before commenting wrongly about China, it is better they look at the rising water under his leg which will soon drown them.
Perhaps they never wattch TV, listen to the radio, reading newspaper, or browsing in the Internet.
These stupid folks are telling lies to themselves and hoping others will believe them.

You just forked out $1.5 Trillion in stimulus packages this year. How much is left?:)

Why don't you argue with Forbes List.

A-HAHHAHAHAHAHAHHAHAHAHAHAHA!

I don't think so that's not what our magazines say in the USA---Forbes, WSJ and Business Week say. However ,why does a Chinese like Gordon Chang, say so many bad things about China? Could he be right?
Wall Street says China is on a roll again, but u know why they say that, because if China falls Wall Street falls so they can be biased.