China's Imminent Economic Crisis Startles Economists

China Starts to feel the HEAT of an Economic Meltdown

Beijing's National Bureau of Statistics revealed China's GDP growth in the fourth quarter slowed to 8.9% from 9.2% in 2011.
 

Reuters and Associated Press believe China's economic growth this year is still falling, but is expected to have a "soft landing."
 

Other media and academics are worried that China's economy this year may actually experience a "hard landing."

On January 17, at the State Council Information Office press conference, Chief of Bureau of Statistics, Ma Jiantang spoke about China's GDP growth. Ma said, despite its decrease in 2011, GDP growth was largely in line with macro-control goals.

Ma Jiantang commented that 2011's global financial crisis should invite concerns about 2012's economic development.

Chen Zhifei, Professor of Economics from City University of New York, said, the Chinese Communist Party (CCP) always reports the good rather than the bad news. Ma Jiantang's remarks are actually a reminder of the severity of the situation.

Chen Zhifei: 

"There is a trend of decline in China's economy now. The surface fixes and false data can't be hidden any more. Overall, the conclusion is that China's economy is still in a very grim situation, which is indeed worrying."

On January 18, the Ministry of Commerce announced that China's 2011 European and American investments declined.
US investments decreased 26.07%. Pittance Investments from the EU decreased 3.65%.

On January 12, The Guardian cited Albert Edwards (Head of economic strategy from the French bank "Societe Generale"). His analysis showed, China is likely to face a "hard landing" (that is just a prelude to TOTAL COLLAPSE) in 2012 which will lead to the global economic crisis' climax. Edwards warned that the Chinese economy expended with about 10% average annual growth over the past 20 years. But with the two touches of the economic bottom in the West and China's overheated real estate market, China's economy may face serious problem in the future.

Chen Zhifei:

"With the further deepening debt crisis in Europe this year, China's economy will encounter greater challenges. From a domestic perspective, the real estate bubble and overall decline of manufacturing industries, as well as other aspects promoting economic development, will make the CCP unable to do anything. Plus the inflation, they all make a cycle, which China's economy cannot jump out of."

Bureau of Statistics' latest figures show that China's urban population reached 51.3%, exceeding the rural population,
This is for the first time in China's history.
Ma Jiantang believes that changes in population structure will play a positive role in promoting domestic demand. He does not think that local debt and real estate are the largest risks of China's economic performance.

Beijing economist, Feng Xingyuan, said that China's GDP is still dominated by the government's investment and administration (or rather, draconian oppression), which runs counter to the market economy.

In the first half of 2012, real estate may experience a major reshuffle. Private investments unable to withstand restriction measures will quit.

Feng Xingyuan:

"Last year, the restriction measures affected the overall size and growth rate of GDP. The growth rate is kept in the way of national development and people's regression. For example, the development of protection housing is in fact a form of increasing government investment to maintain GDP."

According to the released GDP from Bureau of Statistics, in 2011, China's GDP per capita is 5,000 dollars. Sun Lijian, Vice President of Economics at Fudan University believes, GDP per capita is still questionable, and can have a downward trend. Cai Zhizhou, Research Center of National Accounts from Peking University pointed out that in 2010, China's GDP per capita ranked 95th in the world.

And that China's last year figure was almost the same as that of Namibia, Africa, for 2010. Germany's Der Spiegel commented that for China, this is almost a critical value. The growing wealthy class needs to share the success with lower income class, otherwise, it will be difficult to avoid a great social upheaval.