The CCP printed and issued approximately 54 trillion yuan in banknotes from 2021 to 2023, but it did not have a positive impact on China’s economy and people’s lives. Pictured is the Central Bank of China. (China Photos/Getty Images)
[The Epoch Times, February 17, 2024](Interview and report by Epoch Times Special Topics Department reporter Xu Yiyang) The latest official figures released by the Chinese Communist Party show that China’s national consumer price index (CPI) in January 2024 fell by 0.8% year-on-year, showing that the economy The risk of deflation continues. However, it is worth noting that between 2021 and 2023, the Chinese Communist Party printed and issued approximately 54 trillion yuan (approximately 7.6 trillion U.S. dollars) of banknotes. Despite the huge scale of money printing, it does not seem to have any positive impact on China’s economy and people’s livelihood.
The latest official data released by the Communist Party of China shows that in January 2024, the CPI fell by 0.8% year-on-year, the largest decline in more than 14 years, and worse than market expectations. Given that the CCP has always fabricated statistical data to whitewash the situation, the real situation may be even more severe.
Statistics show that food prices fell by 5.9% year-on-year in January. Among foods, the prices of pork, fresh vegetables and fresh fruits fell by 17.3%, 12.7% and 9.1% respectively year-on-year, becoming the main factor driving the year-on-year decline in CPI.
From the beginning of 2023 to January 2024, China’s CPI year-on-year data has shown an overall downward trend, and has been declining for four consecutive months. The year-on-year decline in January 2024 was the largest since September 2009, highlighting rising deflationary pressures.
At the same time, the national industrial producer price index (PPI) also declined both month-on-month and year-on-year in January. PPI fell by 2.5% year-on-year and 0.2% month-on-month.
However, official statistics also show that the CCP will print and issue approximately 54 trillion yuan between 2021 and 2023.
At the end of December 2023, the balance of China’s broad money (M2) was 292.27 trillion yuan (about 41.14 trillion U.S. dollars); at the end of December 2022, the M2 balance was 266.43 trillion yuan (about 38.15 trillion U.S. dollars); at the end of December 2021, M2 The balance is 238.29 trillion yuan (approximately 37.4 trillion U.S. dollars).
According to the above data, the CCP will issue new RMB 25.84 trillion (approximately US$3.63 trillion) in 2023; in 2022, it will issue new RMB 28.14 trillion (approximately US$4.03 trillion). Adding the two together, the CCP printed as much as 53.98 trillion yuan (about 7.66 trillion U.S. dollars) in these two years.
The calculation method of broad money (M2) is the total amount of money in circulation in society plus demand deposits, as well as time deposits and savings deposits.
Ma Jinghao, a Chinese finance and taxation expert, posted on Weibo in February 2023 that the CCP will print a total of 28 trillion yuan in money in 2022. This number is equivalent to the combined money printing of the United States, Japan and the European Union, and China’s domestic The gross product (GDP) is only about 70% of that of the United States. He questioned: “With so much money printed, the stock market has not risen much, house prices have not risen much, and prices have not risen much. Why is this?”
Lu Yuanxing, a political and economic analyst based in the United States who once served as a marketing executive at a Chinese company, said that last year, the Chinese Communist Party officials had been vigorously denying that deflation was occurring in the Chinese economy. However, the actual situation has repeatedly proven that what the Chinese Communist Party denies is usually true.
On February 16, Lu Yuanxing said in an interview with an Epoch Times reporter that deflation is of course due to economic decline. But in fact, China’s economy can no longer simply apply the framework of traditional Western economics. In other words, it no longer conforms to the traditional concepts of inflation or deflation, but is a unique economic model under the control of the Chinese Communist dictatorship.
Lu Yuanxing said that in Western economics, an increase in currency circulation is usually regarded as inflation, and the opposite is deflation. In addition, from the perspective of phenomena, rising CPI is considered to be a manifestation of inflation, while falling CPI is considered to be deflation. However, a very strange contradictory phenomenon has occurred in China: on the one hand, the CCP prints a large amount of money and widely distributes currency, which meets the definition of inflation; on the other hand, after the currency is issued, it does not really enter the circulation field and does not enter the physical entity. Economy, but only circulating within the financial system, a phenomenon of “financial idling” has occurred. Therefore, it has not produced the effect of promoting economic development. However, China’s economy is declining and prices are falling. In other words, the actual currency in circulation has truly exerted its influence. The amount of money that plays a role is actually decreasing, so deflation occurs.
“This is because China’s economy is not a market economy.” Lu Yuanxing said, “In addition, there are a large number of corrupt officials within the CCP system. Those officials rarely really think about the country and the people, but only want to keep their official titles and make money for themselves. Money, so part of the additional currency was transferred to the names of individuals at various stages by officials at all levels or interest groups within the party through various means.”
Where did the additional money go?
The direction of loan investment is one of the “wind vanes” for observing economic development. Where does the additional money go?
Data show that as of the end of 2023, RMB loans have increased by 22.75 trillion yuan (approximately US$3.23 trillion) throughout the year. Among the new parts, household loans increased by 4.33 trillion yuan (about 0.61 trillion U.S. dollars) throughout the year, accounting for about 19% of new loans throughout the year; loans to enterprises and institutions increased by 17.91 trillion yuan (about 2.54 trillion U.S. dollars) , accounting for approximately 78% of new loans throughout the year. In 2023, household loans and loans to enterprises and institutions will basically show a “28” ratio.
Among loans to enterprises and institutions, medium and long-term loans have grown significantly, with an increase of 13.57 trillion yuan (about 1.93 trillion U.S. dollars), accounting for about 76% of the increase in loans to enterprises and institutions; while the proportion of short-term loans is significantly smaller. .
Generally speaking, in terms of the purpose of loans, medium and long-term loans are often used in areas such as fixed asset investment, while short-term loans are usually needed for working capital needs of borrowers in production and operations.
In addition, RMB deposits increased by 25.74 trillion yuan (approximately US$3.65 trillion) throughout 2023. Among them, household deposits increased by 16.67 trillion yuan (about 2.37 trillion U.S. dollars).
Lu Yuanxing said that the newly issued RMB issued by the CCP has been released in the form of loans, and then these funds were turned into deposits.
He said: “Loans from enterprises and institutions accounted for nearly 80%, which means that these funds were mainly taken away by large state-owned enterprises such as central enterprises, institutions or local state-owned enterprises through loans. However, after the money was taken away, there was no They are invested in places that can produce benefits, because they also know that they cannot make money by investing, so some simply save it and turn it into deposits, and some are divided up by the CCP’s powerful people in disguise. Therefore, these funds cannot really enter the circulation field. “
Lu Yuanxing explained that the CCP has invested too much money in infrastructure construction, including real estate, but these infrastructures have already been severely bubbled, and the real estate built will eventually become useless reinforced concrete garbage. If you can’t make money, if you invest it again, it will be zero, and it will not stimulate the economy.
He also said that China’s economy has been experiencing severe deflation in the past two years, but the CCP is desperately printing money. It thinks that issuing more money can stimulate economic growth, but China’s biggest problem now is actually insufficient consumption power.
He said: “One reason for insufficient consumption is the massive decline in population. With fewer people, there will naturally be less money. A large number of people died during the epidemic, and the CCP has been covering up the truth. The other most important reason is that the people have no money, and the CCP Corrupt officials embezzle and exploit money that should belong to the people. It is impossible for the people to have money to spend. The less money they have, the less they dare to spend. The current economic situation is not good, especially after the epidemic, people are worried about the future and even more afraid To consume, they choose to save as much as possible rather than spend money.”
Editor in charge: Lian Shuhua#
2024-02-17 11:13:00
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