400 million people are waiting for employment, and the Ministry of Finance has cut personal income tax by 15%; Beijing real estate prices have plummeted, and the top of the real estate market has collapsed; 80% of the additional RMB issuance is out of circulation, how long can the RMB exchange rate hold? Xi Jinping is not popular, and foreign businessmen continue to withdraw. (Provided by “Elite Forum”)
[The Epoch Times, March 29, 2024]After entering 2024, the exchange rate of the RMB against the US dollar has been slowly declining. Last week, there was a sudden sharp drop. Although it did not fall to the lowest point in September and October last year, it It also attracted a lot of attention. On the other hand, China’s loose monetary policy did not bring about inflation. On the contrary, housing prices and consumer index went in the opposite direction. What does this strange trend indicate? What is the biggest crisis facing the Chinese economy now? Will the RMB continue to decline?
The Bureau of Statistics is frantic about fraud and China’s unemployed population reaches 400 million
Cai Shenkun, a senior Chinese journalist living in the United States, said in NTDTV’s “Elite Forum” program that the CCP Bureau of Statistics released economic data for the first two months of this year in March, and these data cannot withstand scrutiny. For example, the Bureau of Statistics boasted that fixed asset investment from January to February was 5,084.7 billion yuan, an increase of 4.2% year-on-year. However, if we turn out the figures from January to February last year, fixed asset investment from January to February last year was 5,357.7 billion yuan. According to this figure, it is clearly a decrease of 5.1%, rather than an increase of 4.2%. Therefore, the moisture in the figure of the Bureau of Statistics is huge.
There is also an investment involving real estate. We saw that the Bureau of Statistics said it only fell by 9%. But when we calculated the figures from the Bureau of Statistics last year, it fell by 13.7%. Looking at the real estate sales data, the Bureau of Statistics announced that it dropped by 20.5%, but compared with last year’s data, the actual decline has reached 29%. What do these data indicate? This shows that the Bureau of Statistics is now releasing data completely in accordance with the central government’s message of economic brilliance. It is not a real data at all, but completely deviates from the basic facts.
More importantly, the figures released by the Ministry of Finance are also quite interesting. The personal income tax announced by the Ministry of Finance from January to February was 326.2 billion, a decrease of 15.9% compared with January and February last year. We should not underestimate this 15.9% drop. This is actually a substantial drop in personal income. Because there is no way to evade personal income tax in China. When you pay wages, no matter the company is large or small, this personal tax will be deducted from you. If you think about it, personal income tax fell so much from January to February and people’s incomes didn’t grow. How could consumption grow? How can the total retail sales of this product be increased?
The Government Work Report of the State Council mentioned that the employment problem of 12 million people will be solved this year. But last year, the unemployment rate among young people in China actually reached about 50%. In fact, at least tens of millions of people in China are now completely unemployed. So we saw Huang Qifan, the former mayor of Chongqing, mentioned not long ago that the employment population that China urgently needs to be arranged actually needs to provide employment for at least 400 million people. You will create 12 million new jobs this year, which is actually completely insufficient. To solve the current unemployment problem. It is very difficult to find a job now. I have a relative who graduated from New York University and went back last year. So far, he has not been able to find a basic job. According to past practice, graduate students from New York University can still find an ordinary job no matter how close they are to finding one when they return to China. But now they can’t find it. In fact, there is a big problem with employment.
Real estate in first-tier cities plummeted, and housing in school districts in Beijing also fell.
Independent TV producer Li Jun said in the “Elite Forum” that I have seen some statistics in the real estate industry, including statistics from some professional organizations. In fact, in January and February, the sales of new and second-hand real estate houses in China may have dropped by 50%. Right and left, the decline is very large. The second is that housing prices continue to decline, and they are a bit bottomless. Recently, a Tianjin-based internet writer wrote about a case online. He said that a good friend of his sold a house, which was originally worth about 2.2 million. When he wanted to sell it in early 2023, he quoted 1.7 million, which was a reduction of 500,000. As a result, there were only three calls in a year, all from real estate agents. These agents all said that your house price was too high and they would lower it again. He dropped the price from 1.7 million to 1.3 million. After a year, no one took any interest. At the beginning of 2024, a buyer finally came. The buyer quoted an offer of only 800,000. His friend said angrily, I won’t sell it. The buyer told him, if you don’t sell now, by the end of this year, you won’t be able to sell even 400,000 yuan. At that time, this Internet writer said that this real estate industry is too deceptive and everyone must not jump into this trap. This is the situation in Tianjin.
There is also a story about Beijing. The city with the strongest real estate prices in China is Beijing. When Shanghai and Shenzhen were unable to hold up, Beijing was able to hold up because it is the capital, and local government officials, including state-owned enterprises, bought properties to support them. But there is news in Beijing recently that the house price in Zhongguancun, the most popular school district in Haidian District, was originally priced at 220,000 square meters, and a house of 100 square meters cost tens of millions. As a result, the house prices have recently started to drop by millions. Think about it, everyone, if even the prices of housing in school districts in Beijing are reduced, what will the prices across the country be like? In addition, according to last year’s statistics, foreclosures increased by 40% throughout the year compared with the previous year, by 35% in the first half of the year, and by 45% in the second half of the year. Some relevant people have also done analysis and said that this year 2024 may increase much more than last year.
The central bank boss blurted out that the RMB-USD exchange rate is at least 15:1
Shi Shan, senior editor and chief writer of The Epoch Times, said in the “Elite Forum” that I saw some news two days ago, saying that the real estate crisis has now moved downstream, and now industries such as steel companies and cement companies have begun to explode, and I am the one who has accepted it. Your money is intended to provide you with steel bars, cement, and building materials. Suddenly the company disappears and the money you paid is gone.
Shishan said that in fact, the RMB has also reflected this. Last week, the offshore price of RMB against the U.S. dollar fell sharply. Now it is about 7.25 to 1 US dollar, which is equivalent to going back a little bit. What will be the prospects for the RMB this year? Will it continue to fall? Or is it possible to stand firm? I read that some experts have analyzed that China’s M2 currency has exceeded 300 billion yuan in the first quarter of this year, and the monthly growth is 1.7 trillion U.S. dollars. This is terrible. Because the United States only has two to three trillion dollars every year, and China’s excessive increase in currency, logically speaking, it should lead to an increase in commodity prices and asset prices, which is inflation. However, this has not happened in China at all. A friend of mine who is engaged in finance recently told me that China is probably based on the 28th principle. 20% of the new currency enters the private sector or enters the circulation field, and 80% is actually absorbed by the government, financial institutions and large state-owned enterprises. It is equivalent to filling the original debt. Basically, the government borrows new debt to repay old debt and fill in previous infrastructure projects, so it is all idle without any benefit. There are big and big problems in this.
Cai Shenkun said in the “Elite Forum” that both domestic and overseas people are very concerned about whether the current exchange rate of the RMB against the US dollar will decline or remain relatively stable in the future. I think on the one hand, we have to look at the fundamentals of China’s economy, including trade data. If the data is ideal, it will remain relatively stable. On the other hand, we also need to look at the total currency issuance. If we simply look at the issuance of U.S. dollars and RMB, the current public data as of February this year show that the total currency issuance in the United States is 20.78 trillion U.S. dollars, while China In fact, it has reached 300 billion yuan, which is 42 trillion U.S. dollars when converted into U.S. dollars, which is already double that of the United States. If we simply look at the comparison between the two, the current exchange rate between RMB and the United States is untenable. The RMB exchange rate now depends entirely on the government’s strong foreign exchange controls. If it relaxes capital controls and makes the RMB fully convertible and capital can run freely, there will be no prospects for the RMB exchange rate. Because in my early years, when I was still in Beijing, I once talked about this topic with Li Yang, the former member of the Monetary Committee of the People’s Bank of China. He blurted out at that time that a conservative ratio of 1:15 (USD to RMB) ).
Cai Shenkun said that if calculated at 1:15, China’s per capita GDP would no longer be US$12,700, and would at least return to the level of 2013, which was US$6,100 per capita. Therefore, the Chinese Communist Party is now trying its best to maintain the exchange rate of RMB against the US dollar. Because if the exchange rate of the RMB against the U.S. dollar drops sharply, its per capita GDP will decrease, and then both Xi Jinping and the current top leaders of the CCP will be disgraced. They always boast that they have entered a developed country. When the time comes, it may return to a developing country, or even a poor and backward country. So they have to do their best to maintain it.
Xi Jinping will not be affected by foreign businessmen’s reaction to US-China decoupling in the next 30 years
“The Epoch Times” editor-in-chief Guo Jun said in the “Elite Forum” that a high-level forum on China’s development is being held in Beijing these two days. A key part of this forum is the closed-door meeting between the Premier of the State Council and foreign businessmen. However, it is said that this year the State Council will not attended, which is related to the huge changes in the functions of the State Council. In the past, the State Council was an administrative power agency with economic decision-making and execution powers, but now it has no decision-making powers and has become an executive agency. This is also the biggest change in this year’s two sessions.
In the past, this high-level economic development forum was attended by major foreign businessmen. The most important factor was that they could have a closed-door meeting with the Premier of the State Council. As we all know, in public, only superficial things are discussed, and the real bargaining is done behind closed doors. Therefore, foreign businessmen attach great importance to these functions of this closed-door meeting. The Wall Street Journal said that Xi Jinping was going to attend this closed-door meeting. A few days ago, it was said that the Chinese Communist Party officials were reviewing the list of foreign businessmen who were going to attend. As a result, many foreign businessmen were no longer interested, and many people left early. It was Xi Jinping who was going , but everyone didn’t want to go and all left. In fact, I can understand this, because Xi Jinping has met many big American businessmen in the past, and the topics he discussed were not key and sensitive topics. I estimate that because Xi Jinping wants to maintain this authoritative posture, he lacks a discussion and communication model when meeting foreign businessmen, so foreign businessmen have little interest in him.
This also involves another issue, that is, foreign businessmen investing in China, especially American businessmen, are essentially stepping on two boats, stepping on both the United States and China. The problem is that China and the United States are now decoupling, and the two ships are starting to go their separate ways. It may become very difficult to tread on two ships. So this is the biggest problem for foreign businessmen in China at the moment. I think as the confrontation between China and the United States becomes more and more serious, especially now that the two camps of the new Cold War are becoming more and more clear, the two ships will go further and further. Far.
Over the past decade or so, Wall Street has played a huge role in mainland China. But now Wall Street has encountered some obstacles. The key obstacle is not the negative words we say to them, but an effect of the political evolution of the CCP itself. The CCP is now making every effort to prevent the rise of capitalists and foreign forces, such as the Secrecy Law, the Counterespionage Law, the National Security Law in Hong Kong, and the recently announced Article 23, etc., which are all aimed at foreign businessmen and big names. For enterprises, especially high-tech foreign businessmen, this is a very contradictory policy.
Guo Jun said that both Chinese and foreign high-tech companies are now in a very difficult situation. They are very troubled and don’t know what to do. The withdrawal of foreign capital in recent months is obvious. The Chinese government said how much foreign capital has entered mainland China. However, Hong Kong experts analyzed it and found that most of the capital entering China recently is Chinese-funded companies, that is, China funds overseas. We have seen that the decoupling of China and the United States is a long-term process that will affect the next thirty years. Now I think it has just begun.
The new TV program “Elite Forum” launched by NTDTV and The Epoch Times is a high-end TV forum based in the Chinese world. The program will bring together elites from all walks of life around the world to focus on hot topics, analyze the general trend of the world, and provide viewers with relevant social affairs and history. An in-depth look at the truth.
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2024-03-29 08:42:17
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