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OK, here is the last Broken China update of the year. 2023 was NOT been a good year for the People's Republic of China. Compared to what is coming in 2024 it will likely be looked back on fondly.
Item One:
At an end of year Financial Work Conference the summary stated, "We must adhere to the principle of the party and government agencies living the 'frugal life'." This theme has been echoed from Xi JinPooh down through provincial, county, and local governments around the country. In Fujian province they specifically stated that performance and image projects should be suspended and no new ones undertaken.
I take this to mean that budget cuts are coming. They went on to say, "Business expenses and public funds are to be reduced by 10% and 20% respectively."
On December 25th, Lao Man, a respected financial analyst in China wrote in an article stating that, "The CCP government might take two paths in the future but both paths lead to a dead end. The first one is that the CCP government does nothing and just shouts slogans which will result in severe deflation and a major economic depression. The second is that the CCP government refuses to do nothing and insists on making significant efforts which will lead to unanchored money printing and severe inflation."
Lao Man stated that the outcomes of these two paths are no different. Both lead to economic collapse. He thinks that before the total collapse a war will break out and that it will happen within the next two years leading to an even quicker demise of the economy and the CCP. He believes that the CCP will not choose comprehensive political and economic reform and so the ending is foretold but the timing is uncertain.
Before any of you get to giddy over the impending collapse of the CCP, this is fraught with dangers for us (US) and our allies. A declining China is in our interest. A collapsing China is NOT in our interest.
As long as the CCP thinks it can salvage the situation and remain in power we will be fine. It is when they get desperate that the real danger arises. Desperate people act irrationally and can do REALLY dumb things that get more than them hurt.
Item Two:
There is a report out that earlier this years several senior members of the PLA Rocket Force defected to Western Intelligence services bringing with them significant information about the organization and capabilities of the Rocket Force.
If true, this is very damaging to the PRC and the CCP. I don't have any way of verifying how much of this report is true.
Item Three:
It took the British almost 100 years to build Hong Kong into the third most powerful financial center in the world. It has taken the CCP less than five years to reduce it to ruin.
A Hong Kong financial commentator wrote: "If a word for the year (2023) is to be chosen, I suggest 'fall.' Housing prices fall, stock prices fall, incomes fall, exports fall, investments fall, exchange rates fall, employment fall, birth rates fall .... Everything related to the lives of ordinary people is falling apart. Of course, the only thing growing is government debt."
I reiterate, a declining China is in our interest. A collapsing China is NOT in our interest. If I had to bet on it, I would bet on collapse. This does NOT make me a happy camper.
WWG1WGA
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)