Top Story – Desperate cadres try to avoid economic collapse by cranking up the spending to 11: Premier Li Keqiang himself – the fellow who set up his own economic index to get past fudged numbers, and thus knows how bad things really are – is insisting that “official” economic growth can never fall below 7%. Ambrose Evans-Pritchard (Telegraph, UK) has the details…
Already we hear talk of more investment on railway projects, social housing, infrastructure, green energy, sewage, broadband and G4, the tried and tested levers of fiscal stimulus.
Ting Lu from Bank of America calls it the ‘Li Keqiang Put’. That is certainly what it looks like.
Moves last week to liberalise interest rates were seen by many in China – though not all – as a disguised way to lower borrowing costs and avert a wave of bankruptcies.
So there we are, the on-again off-again credit boom may soon be on once more, even though each extra yuan of credit now generates less than 0.2 yuan of growth compared to 0.85 before the Great Recession.
Yours truly shares Evans-Pritchard’s skepticism on this, but he says it better than I ever could…
Now it looks as if Beijing has blinked yet again at the first sign of real trouble. It may take a great deal of stimulus to keep growth at Mr Li’s floor level, given China’s broken model, if it can be done at all. That will store up yet more trouble for the future, and sooner of later the future arrives.
So what is the CCP getting out of this? A bigger military and more corrupt lucre: The former is noted by the indefatigable Bill Gertz (Washington Times), who has the latest on the regime’s missile submarine program, and the Taipei Times, which covers the rise of the Communists’ new Coast Guard – keep in mind that the regime includes a lot of its neighbors’ territory in its claimed “coast”. As for the latter, Fang Xiao (Epoch Times) details the life, times, and fall of one high-ranking, big-spending cadre.
Hong Kong News – Communist-linked group tries to disrupt Falun Gong, again: Shannon Liao (Epoch Times) has the details of the latest scrap between the spiritual movement and the Hong Kong Youth Care Association.
Taiwan still roiling over cross-strait services agreement: The editors of the Liberty Times were particularly brutal (reprinted by the sister paper – the Taipei Times), but they weren’t alone (Taipei Times).
Other Taiwan news: The argument over “Japanese occupation” versus “Japanese rule” to describe the events of 1895-1945 continues (Taipei Times). Former DPP presidential candidate Tsai Ing-wen (endorse by yours truly in 2012), leaves open the possibility of running again in 2016 (Taipei Times). Meanwhile, her party calls for greater civilian oversight of the Taiwanese military (Taipei Times).