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Global Perspectives (8)

Resources related to global perspectives, i.e. view on the effect of global economy on cross-cultural exchange, worldwide relationships, and the relations between people.

China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned.

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times soon ahead.

Charlene Chu, the agency's senior director in Beijing explained "The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation".

HSBC China PMI just released now, and it decreased further, confirming the beginning of a contraction of tis economy like it already happened in the summer 2012.

It went from 51.1 in April, then 49.6 and is now 49.2 in May! Below 50 is a sign of economic contraction.

This HSBC PMI is based on the private sector, while the China official NBS (National Bureau of Stats) PMI is more based on SOE (State Owned Enterprise) and thus easier to fake.

And so what was China's official PMI? It went from 50.6 to 50.8 ! Yes, of course, the word "man-made" comes to mind.

China is inexorably heading to a major change of policy, be it smoothly a la Gorbachev or the hard way, since the people want more growth and thus more freedom, and current policies restrain it. The question is how much resistance will the Chinese government exert before realizing the urgency to radically change. Will they learn from past history with the Qing Empire downfall, or the one of the Tsar or the French revolution?

After HSBC selling its entire 8% stake in Shanghai Bank, now it the turn for Goldman Sachs, and they are not alone: banks like Bank of America and RBS selling stakes in their massive China state-owned banks. A move that is annoying communist officials.

In the annual report to Congress titled "Military and Security Developments Involving the People's Republic of China 2013", the Pentagon said, "In September 2012, China began using improperly drawn straight baseline claims around the Senkaku Islands, adding to its network of maritime claims inconsistent with international law."

 

A study, titled “What kind of democracy do Chinese people want”, was published by Zhang Mingshu, a researcher for the Chinese Academy of Social Sciences’ Institute of Political Science. Its results have surprised even the study's author.

 

Chinese urban residents have become more conservative, cynical and pragmatic in their attitudes towards politics in the last quarter of century, a study has found.

 

While 38.1% would fall into the “left”, a term traditionally referring to citizens with socialist or communist leanings, which in China’s case also means those more "patriotic" and "conservative", according to the study, 59.5% either did not care or favored a more liberal system.

“I was surprised by the results”, Zhang, said in an interview with Southern Weekend, a weekly Guangzhou newspaper. “But if you observed outside the intellectual circle, on the streets in your hometown, you would find the ratio to be accurate.”

 

 

Counterfeit goods make up about 2% of world trade, worth about $250 billion a year, according to a report released today (April 16) on transnational crime in Asia by the United Nations Office on Drug and Crimes (UNODC). And, 67% of those counterfeit products were manufactured in China (pdf, p. 122), according to data on goods seized worldwide between 2008 and 2010.

 

Kishore Mahbubani, a prominent Singaporean academic, has urged Japan to display greater leadership on the world stage and act as a bridge between Asia and the West, as in his view the global order has started to shift.

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