January 4, 2019

CHINA: Bribing Big Brother.

In December, for the first time since February 2016, Chinese factory activity declined. That alone was enough to cause stock markets worldwide to continue their sharp declines because the factory slowdown was more evidence that the entire Chinese economy was hitting a rough patch. It was also confirmed that Chinese GDP growth in 2018 was 6.5 percent and many economic indicators continue declining while those in the United States are growing. This is a reminder that the current trade war with the United States favors the Americans for many reasons that Chinese leaders cannot ignore. China has hit economic slumps since the 1990s, usually the result of economic problems in the West. But now the cause is China because of a lot of bad decisions that are now catching up with the Chinese leadership that made all the mistakes in the first place. Years of tolerating corruption and ignoring the growth of bad loans (that were at the basis of much corruption) means that just borrowing more money to give the economy a boost will not work.

Scroll down for some interesting comments on Russia’s relationship with China and how “money talks in different dialects.”

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