How long has it been since you saw news about the Belt and Road Initiative? China has not talked about it for half a year, and its Taiwanese cheer squad has also fallen silent.
In August last year, Malaysian Prime Minister Mahathir Mohamad announced the termination of his nation’s big East Coast Rail Link contract with China after he was given the cold shoulder during a visit to Beijing.
Two months later on Oct. 4 when the US-China trade dispute was picking up speed, US Vice President Mike Pence delivered a speech on China at the Hudson Institute in Washington. That was when the world finally saw through the expansionist ambition behind the initiative.
China intended to export its overcapacity in the railway, highway and airport sectors while creating a debt trap to hold other countries hostage, all while supporting corrupt, puppet regimes, of which Venezuela is blood-drenched proof.
It remains uncertain to what extent Chinese President Xi Jinping (習近平) has fulfilled his “China dream” since announcing his strategic goal in 2014.
However, his spendthrift policy has caused a domestic backlash, as the widening poverty gap is intensifying the sense of deprivation and planting the seeds of social unrest.
Xi has had no choice but to spend huge amounts of money to stabilize the situation, further intensifying China’s debt crisis.
Knowing that he could not continue, Xi changed his approach. On Feb. 18, the Chinese State Council announced the Guangdong-Hong Kong-Macau Greater Bay Area plan, which is to bring together Hong Kong, Macau and nine cities in the Pearl River Delta to an economic zone covering 56,000km2 and 66 million people.
The plan adds to the mirage of China’s economic prosperity, which is created by printing money and flipping property. The combined market value of properties in Beijing, Shanghai, Shenzhen and Guangzhou exceeds the value of all property in the US.
Last year, China’s broad money supply, M2, increased by 174 trillion yuan (US$26 trillion at the current exchange rate), more than twice its GDP, and the total market value of its housing market is five times its GDP.
The bubble economy is growing and no one knows how to fix it.
Economics 101 says that printing two dollars to produce something worth one dollar leads to inflation.
However, China uses forceful controls to distort economic laws and directs huge capital flows toward the real-estate market, using it as a reservoir and turning 1.4 billion Chinese into mortgage slaves while the government reaps great financial benefit. As the public’s purchasing power weakens, they have no choice but to become docile, obedient citizens.
Now that the Belt and Road Initiative is broken, China is turning to Hong Kong. Once trapped, the “one country, two systems” framework will be put to sleep and Hong Kongers’ assets will dry up.
Worse still, Hong Kong will lose its century-old reputation for financial freedom as it is sacrificed in the competition between the great powers.
China’s economic volume is 63 percent that of the US, but it issues two times more yuan than the US issues dollars, while the real value of the yuan is anyone’s guess. This is how “red capital” survives.
Late last year, Taiwanese yuan deposits hit nearly 300 billion yuan, but the value of yuan-denominated financial instruments is unclear, something those who fantasize about the currency should consider.
As for Taiwanese businesspeople who have funds trapped in China, all that can be done is to wish them good luck.
Chen Chih-ko is a non-professional investor and a resident of New Taipei City.
Translated by Chang Ho-ming
In a summer of intense political maneuvering, Taiwanese, whose democratic vibrancy is a constant rebuke to Beijing’s authoritarianism, delivered a powerful verdict not on China, but on their own political leaders. Two high-profile recall campaigns, driven by the ruling party against its opposition, collapsed in failure. It was a clear signal that after months of bitter confrontation, the Taiwanese public is demanding a shift from perpetual campaign mode to the hard work of governing. For Washington and other world capitals, this is more than a distant political drama. The stability of Taiwan is vital, as it serves as a key player
Much like the first round on July 26, Saturday’s second wave of recall elections — this time targeting seven Chinese Nationalist Party (KMT) lawmakers — also failed. With all 31 KMT legislators who faced recall this summer secure in their posts, the mass recall campaign has come to an end. The outcome was unsurprising. Last month’s across-the-board defeats had already dealt a heavy blow to the morale of recall advocates and the ruling Democratic Progressive Party (DPP), while bolstering the confidence of the KMT and its ally the Taiwan People’s Party (TPP). It seemed a foregone conclusion that recalls would falter, as
The fallout from the mass recalls and the referendum on restarting the Ma-anshan Nuclear Power Plant continues to monopolize the news. The general consensus is that the Democratic Progressive Party (DPP) has been bloodied and found wanting, and is in need of reflection and a course correction if it is to avoid electoral defeat. The Chinese Nationalist Party (KMT) has not emerged unscathed, either, but has the opportunity of making a relatively clean break. That depends on who the party on Oct. 18 picks to replace outgoing KMT Chairman Eric Chu (朱立倫). What is certain is that, with the dust settling
Mainland Affairs Council Deputy Minister Shen You-chung (沈有忠) on Thursday last week urged democratic nations to boycott China’s military parade on Wednesday next week. The parade, a grand display of Beijing’s military hardware, is meant to commemorate the 80th anniversary of Japan’s surrender in World War II. While China has invited world leaders to attend, many have declined. A Kyodo News report on Sunday said that Japan has asked European and Asian leaders who have yet to respond to the invitation to refrain from attending. Tokyo is seeking to prevent Beijing from spreading its distorted interpretation of wartime history, the report
RSS