During the past two months China’s export has
declined rapidly, as has real estate volume and price.
The international community considers that two of the three
factors to push China’s economic growth have declined.
In addition, the cost of investment
that drives economy is too high.
This year, the 7.5% gross domestic product
(GDP) growth target is not reachable.
China’s General Administration of Customs
released new data on March 8, 2014.
China’s February export was 696.52 yuan, down 20.4%.
Import was 836.31 billion yuan, an increase
of 7%, with trade deficit of 139.79 billion yuan.
In addition, the median open price of RMB against the
U.S. dollar was low on March 10, and fell nearly 30 points.
The biggest decline reached more than
0.5%, and is the largest since July 2012.
It is generally believed that the central
bank is intentionally undervaluing the
yuan in an attempt to boost exports.
Du Dao, CCTV financial commentator: “It is not
adjusted, but decided by the international market.
Another reason is that the USD (dollar) is leaving
China, resulting in devaluation of the yuan.
Many people sold their homes and
exchanged their money to dollars.
The banks do not have enough dollars.
They are buying dollars from the central
bank, causing a devaluation of the yuan.
The central bank tries to weaken dollar and appreciate
yuan, even during the time of sharp decline of the yuan.
We see it clearly in the market.”
On March 9, China’s National Bureau
of Statistics announced that the Consumer
Price Index (CPI) rose 0.5% in February.
This is a year on year rise of 2.0%.
The Industrial Producer Price Index (PPI)
decreased 0.2%, with a 2.0% drop year on year.
China’s PPI has declined for several years.
Ren Zhongdao, China economic analyst:
“Now money supply is sky rocketing.
Money is devaluating in China
and prices and costs are rising.
PPI and CPI should be parallel, but these
two are going in the opposite direction.
In fact, the price is increasing. People have to
bear the loss of assets due to severe inflation.”
From the perspective of capital, seven day interest rates
for pledged repurchase and reverse repurchase of national
debt have both have declined for 20 days in a row.
Nu Dao, a China Central Television financial commentator,
suggested commodity prices rise due to relaxed money supply.
Commodity prices should increase, but
have been declining since last December.
This indicate that China’s money supply has come to
an end, suffering a serious shortage for future demand.
In addition, financial data released on March 10 by
the Central Bank indicated a significant reduction of
833.9 billion yuan of new deposits in January and
February, compared with the same months last year.
Housing transactions for the same
period also decreased by 50%.
Nu Dao: “People do not have much money.
Only a small amount of people are rich.
How can the small amount of rich people
help the country’s economy? It is absurd.
Most people do not have money to spend. Those
who do, have a large amount of housing debts.
The Chinese Communist Party (CCP) is crazy.
Every day it shakes the money from the land.
The more money it supplies, the higher the price of land.”
On March 7, coal, iron ore and charcoal all stopped declining.
Iron ore dropped from 957 yuan per ton during
last November to 780 per ton, a decrease of 18.5%
In addition, thread steel plummeted 2.27 percent, from
3,745 yuan per ton last December to 3,228 per ton.
Power coal dropped from 502 yuan per ton
in last December to 600 per ton, down 17%.
In addition to China’s market, three-month
base metals futures in the London Metal
Exchange (LME) dropped on March 7.
due to concerns about China’s economy.
The price of copper fell nearly 4%,
a record low of seven months.
Lead, zinc, tin also declined more than 2%.
With sharp declines in the market, how will the
CCP achieve its goal of a 7.5% GDP increase?
Nu Dao: “It is a lie, and there is
nothing like a 7.5% GDP growth.
The 7.7% GDP growth last year was all
false. Many people exposed this truth.
Many factories in China could not pay workers’
wages, and lots of people are unemployed.
The CCP is still trying to make a false
façade of prosperity, but it is of no use.”
Economic analyst Ren Zhongdao points out that
among the three key factors of China’s economy,
domestic “consumption" is difficult to stimulate growth.
The CCP has tried to rely on
“investment” to stimulate the economy.
But investment of each yuan only has 20 or 30 cents output.
For “Export”, the competitiveness of the Chinese
market is far less than Southeast Asian countries.
Interview & Edit/LiuHui Post-Production/ZhongYuan