采访/易如 编辑/宋风 后制/周天
A Very Bleak Outlook for China in 2013
Gordon Orr, chairman of McKinsey consulting firm
in Shaighai, made ten predictions about China in 2013.
Among them, the price of pork or chicken will double.
A third tier city will declare bankruptcy, and
the non-performing loans of Chinese banks may surge.
However, scholars believe that China's actual situation
is worse than the predictions. Let's read the report.
On January 17th the Wall Street Journal published the article
"China's 2013: McKinsey executives 10 predictions”.
Chairman Gordon Orr's first prediction is that protests
will heat up, and become more successful.
In recent years, protesting activities have been encouraged by
their rate of success, plus the role of influential social media.
People are now more willing to "loudly" protest.
Economist Jian Tianlun: "In fact, in the past ten years,
protests have been on the rise.
They are either for human rights, anti-demolition,
belief, or economic issues.
The disparity between the rich and the poor and
the variety of social conflicts continue to intensify.
From the economic point of view, income disparity is
particularly serious and continues to intensify each year."
Jian Tianlun said, over the years, it is disproportionate to the
revenue and economic development of most Chinese people.
It is extremely unfair social distribution.
Thus, the increase of protests is inevitable.
The recent "Southern Weekly" incident showed that
people were awakening to human rights.
McKinsey's report also said that
third-tier cities will go bankrupt.
Lan Shu: “The recent Central Economic Work
Conference showed that local governments were asking more than 4 trillion yuan.
That means over 90% of local governments
are in a state of bankruptcy.
If the Central Government denies their requests,
more cities will go bankrupt.”
Lan Shu believes that the Chinese regime
is not interested in market economy.
Its purpose of investment is not for long-term development
but the need to maintain GDP for its legitimacy to rule.
Therefore, many local governments have invested blindly.
Bankruptcy of third-tier cities will greatly impact China,
and its effect will be far greater than that of Greece.
Jian Tianlun pointed out that the Chinese regime currently
relies on investment to promote economic growth.
If the quality of investment does not improve, it will cause
not only environmental damage and ecological imbalance,
but also have a very negative impact on the entire country's
economic development and people's standard of living.
In 2013, bad bank loans may surge,
a significant increase in infrastructure spending.
Price increases for meat or chicken
are all part of predictions.
Economic sociologist, Dr. Cheng Xiaonong, believes that
China's banking issue is far more serious than predicted.
Cheng Xiaonong: "This is the reality of China today.
Local governments must build houses; otherwise, they have
no revenue. Thus, they have to build houses year after year.
Local governments push urbanization,
so they borrow money from banks.
However, they cannot repay those loans,
so the risk for banks naturally increases.”
Cheng Xiaonong pointed out that
the Chinese regime wants nation-wide urbanization.
That takes 60 trillion of investment. However,
money in banks has been borrowed to build houses.
The Banks' own money thus turns into bad debt
from real estate, but more houses need to be built.
Now China has only one way to go and that is inflation.
Cheng Xiaonong said the Chinese people will bear the
burden of inflation even though they can no longer survive.
A visiting scholar in Japan, Luo Tianhao
pointed out that these days,
the high cost of city living and harsh environment
can no longer attract villagers.
Urbanization is going a reverse direction.
Many cities are gradually turning dark.
This scenario will spread to the rest of China.
The "Ghost town" will be all over China,
and that will be a true portrayal of China's future.
We don't know for sure how many more “ghost towns”
like Ordos or Tieling City will appear in the future.