Free Republic

To stimulate the economy, China’s regulators are forcing Chinese banks to meet high loan quotas. To hit the difficult-to-attain targets, ingenious bankers are lending and simultaneously allowing borrowers to deposit identical amounts with their institutions at identical interest rates. Companies no longer want money to launch new projects. Pessimism about the economy dominates thinking in Chinese boardrooms and throughout the rest of society. The big story is not that the Chinese economy is falling apart.

The Chinese Economy Hoax and Other Economists' Fables Michael Ledeen A few years ago, when I was a member of something called “The U.S.-China Strategic Review Commission” (or so I remember it), we issued reports on China’s economy, military strategy, and political situation. In each of the first two such reports (I left the Commission before the third came out, and confess that I haven’t kept up with them) we took pains to state that the “official” data issued by the Chinese Government were totally unreliable. Indeed, we stated explicitly that the numbers were simply made up. Now the World...

EARLY LAST MONTH, the accounting firm of Ernst and Young released a report concluding that the "nonperforming" loans of China's banks totaled $911 billion (40 percent of China's GDP)--a figure that far exceeds the Chinese government's own estimate of $164 billion. Beijing's response to the report was not subtle: "The report not only seriously distorts the actual assets quality of the Chinese banking sector," but "its conclusions are absurd and incomprehensible." Ernst and Young withdrew the report the next day, citing fundamental errors in the analysis.But was the report really that flawed? Or was the firm's report more right than...

Cross-strait vitriol seen backfiring on Chinese economy Jun 7, 2004 TAIPEI – Chinese attacks on Taiwanese pro-independence entrepreneurs could backfire and hurt the mainland economy as businesses here think twice about making further investments in China, analysts and investors said. With cross-strait tensions between Beijing and Taipei spilling over into the business sector, Taiwanese investors are afraid of getting caught in the cross-fire, they said. Official media in China Monday carried a sharply worded attack on Taiwanese entrepreneurs who have investment on the mainland but support independence for the island which Beijing views as part of its territory. It was...

China's sagging economy is threatening to turn China into an Asian version of Argentina, a top financial journal warns. "Unless it can patch up the situation, China risks becoming Asia's Argentina... the people's Republic can go from boom to bust in just a few short years," wrote Gordon Chang in the June 19, Asian Wall Street Journal as quoted by the authoritative American Foreign Policy Council. According to Chang, both countries crammed their banks full of bonds, created growth by playing money games and attracting foreign direct investment... "Argentina," he wrote "deferred reforms by living on foreign capital, and China...

SHANGHAI, CHINA This August, I had lunch at Shanghai's American Club, a posh dining room with a stunning view of the city's restored colonial waterfront, with a Chinese-American executive based in Beijing. All around us, American businesspeople were wooing potential Chinese partners, passing around hundred-dollar bottles of Scotch and demanding private tables so that no one would overhear the deals they were making. Though my lunch companion had worked in China for decades, long enough to grow cynical about any place, he shared the other diners' enthusiasm. "I have invested my assets here," he said, gesturing out the window at...

TOKYO, Dec. 5 Backed by an economy four times the size of China's, Japan still doles out foreign aid to its enormous and thriving neighbor. But to judge by China's recent slights and snubs of Japan, a visitor might think that China is already the economic power of Asia. One day, China slapped emergency tariffs on steel imports from Japan. The next day, Nippon Steel Corporation obligingly announced a $1 billion joint venture with China's largest steel maker to build a state-of-the-art rolled-sheet steel factory in China. When Lee Teng-hui, a former president of Taiwan, applied for a visa...

Return to The Front Page China dream alive and kicking by S.P. Seth Tiawan: Taipei TNA News with Commentary No. 339, June 2002 A new book The China Dream: The Elusive Quest for the Greatest Untapped Market on Earth, provides an analysis of the unrealized hopes of foreign investors and businesses regarding the limitless scope of the mainland China market. In his review of Joe Studwell’s book in the Far Eastern Economic Review, David Murphy comments that, “From the 19th-century English writer, who wistfully hoped that Lancashire's cotton mills would boom if every Chinese was persuaded to lengthen his shirt...