Submitted by Sean Corrigan of Diapason Commodities,
Scanning the Chinese press, the sense is primarily that problems related to their dysfunctional financial system and the gross lack of personal accountability in its exploitation are being detailed everywhere. Troubles involving mutual guarantee companies in Whenzhou, commodity shippers in Qingdao and elsewhere, Ping An insurance execs, BOC/CITI ‘money launderers’ in Guangzhou, steel execs, trust fund sellers, stockbrokers front running orders via their personal accounts, real estate developers colluding with their local government buddies – you name it; and the whole superstructure is, of course, intricately interlocking and hence becoming systemically fragile.
Every day that goes by, China’s “little Dutch boy” needs another finger to plug the new leak he caused by trying to stem the previous one. The risk is, he may soon run out of digits…
Against this backdrop, the regime is trying to launch reforms while not allowing the so-called ‘bicycle’ economy to slow down so much it falls over.
One key point here is that Xi’s increasingly rigorous ‘corruption’ purge has totally paralysed decision makers so that, in fact, it is hard to resist the conclusion that all effort at reform has been completely grounded. This has gone so far beyond the bounds of what s routine that there was even some speculation I read that next move will come uncomfortably close to Li himself (via Xi’s factional struggle rather than through the former’s personal culpability).
No wonder Li is said to be screaming at officials to get of their backsides and DO something in his meetings with them
One element of Xi’s extraordinary concentration of power in his own hands is that he may be putting the nation on a (precautionary) war footing, but the greater point is that the problems he has inherited are so entrenched that every attempted solution becomes a new problem in its turn, hence all the chopping and changing and all the conflicting signals being generated as to the true thrust of policy.
As for his crackdown, if the idea was to scare the previously unresponsive local cadres into compliance with Beijing’s directives, he has WAY overshot that mark. No heads above the parapet now and hence precious little appetite to take bold action, further down the food chain.
Xi seems to have created his own ‘tall poppy’ moment in true Chairman Mao fashion which is hardly helpful when even the partial change in approach being implemented is exposing and undermining so much of the shady practices which were propping up the system previously.
Keep an eye on events in HK, too. The fear of a ‘colour revolution’ being instigated there will only add to paranoia over the unrest in the Muslim West and the sense of strategic encirclement off the Eastern coast.
Interesting times!
via Zero Hedge http://ift.tt/1yeF48A Tyler Durden