STAFF NEWS & ANALYSIS
China Scam Advances
By Staff News & Analysis - December 30, 2011

Guidelines welcome foreign money … Ministry opens more industries to investment from overseas … China will encourage foreign companies to invest more in domestic industries to further make good on the country's commitment to open its economy, according to guidelines released on Thursday. In a new version of the Foreign Direct Investment Industry Guidelines (2011), the Chinese government is encouraging foreign investors to put money into advanced manufacturing, the service industry and certain business concerned with energy conservation, advanced technology, renewable sources of energy, new materials and advanced-equipment manufacturing. Government officials and experts said the new guidelines are in keeping with proposals contained in China's 12th Five-Year Plan (2011-2015), which seeks to lay the foundation for a more innovative and greener economy. – China Daily

Dominant Social Theme: China continues to make progress toward the free market.

Free-Market Analysis: Oh, boy. China is dotted with ghost cities and crashing trains. The solution to China's incredible boom and (eventual) almost incomprehensibly ruinous bust is … more foreign investment!

The world is tapped out and thus the knick-knacks that the Chinese government has demanded its citizens build for Western populations are not selling so well. The flow of currency into China has slowed. Meanwhile, the idea that the Chinese themselves would purchase the flimsy products they sell abroad has gone a-glimmering.

What to do? Well … how about relaxing currency controls? Allow foreign companies to pump more cash into China. Will Western corporations actually do so? Will they throw billions into the sink-hole that is modern China, with its murderous ChiCom system operating in the background and setting the real economic rules?

But why is this necessary at all? In a word … power. Or rather, the necessity to continue to hold on to power. The ChiComs, in our view (and we've gone back and forth on this), are entirely on board with the Anglosphere plan to rule the world. Britain conquered China in the 1800s and nothing much has changed since – at the very top.

The ChiComs have also fully adopted the Anglosphere power elite system of empire which relies on monetary stimulation for economic expansion. In this case, the expansion has been ongoing for about 30 years. It's due for a breather.

Actually, we've written numerous articles expressing the idea that that "breather" has already come. Even mainstream publications have expressed the doubt that the ChiComs can engineer the proverbial soft landing.

But one thing is certain. The ChiComs and the Anglosphere need each other. When China goes into the Big Recession, Europe and America shall not be far behind – again. And in the meantime, China makes a handy enemy.

We've noticed the uptick of saber rattling, of course. Maybe China will emerge as the next Western bugaboo, a kind of Asian USSR. But it will be for show. At the very top, the ChiComs (if they last, and we're not sure they will) and the Anglosphere power elite have a common interest. They are struggling to survive.

It may, in fact, go higher than the ChiComs. In this modern era, the real rulers are usually not revealed, not even to their own people. So the real families running China may yet remain hidden – and be hidden even in the long term to history, too. But the business agenda of the ChiComs is suspiciously similar to the Western one. Here's some more from the article:

Government officials and experts said the new guidelines are in keeping with proposals contained in China's 12th Five-Year Plan (2011-2015), which seeks to lay the foundations for a more innovative and greener economy. On Thursday, the Ministry of Commerce and the National Development and Reform Commission (NDRC) issued the guidelines, which will replace a previous version of the rules that was published in 2007. They are expected to come into force on January 30.

Compared with the 2007 version, the new guidelines encourage foreign companies to invest in a greater number of industries and reduce the number of industries that are off limits to such investment … The guidelines … call for the encouragement of investment into nine service industries. Among them are those concerned with charging electric vehicles and swapping their batteries, protecting intellectual property rights, cleaning up offshore oil pollution and vocational training.

Dirk Moens, secretary general of the European Union Chamber of Commerce in China, said foreign investors are likely to take heed of the government's investment guidelines. This "will indeed facilitate decision-making for foreign investors thinking of coming to China", Moens said … China is now the second-largest destination for such investment in the world and the largest among developing economies. In 2010, the value of foreign direct investment into China hit a record high, increasing to $105.74 billion, a rise of 17.4 percent from the year before.

Do you see, dear reader? Do you pick up on the code words? Chinese officials want a "greener economy." They are concerned about "electric vehicles" and "swapping their batteries." They have deep thoughts about intellectual property rights and offshore oil pollution.

These catchphrases are of the type that could be lifted from an Economist article – that "newspaper" that is a famous mouthpiece for the Anglosphere elites. There is little "daylight" between these concerns and Western ones.

And thus let us try to put it in context. China is a teeming land of 1.4 billion. About 400 million or more live in abject poverty or make a living via rural farming of the most primitive sort. As price inflation has eaten away at the ability of people to afford food, social disturbances have become so prevalent that the Chinese government has stopped reporting on them.

The ChiComs HAVE popped their real-estate bubble apparently, with prices plunging 40-70 percent in certain cities (especially in the empty ones). But that has only aggravated the real problem: The Chinese economic system is not free by any means and offers few legitimate ways that people can save for the future. The ChiComs even banned rural gold exchanges recently.

The ChiComs engineered the Great Leap Forward that starved 50 million. The ChiComs created the crackdown at Tiananmen Square and almost lost their reign as a result. The compact they made with the Chinese people in aggregate was that they would introduce prosperity via free-market measures.

But now that prosperity is deeply threatened by the monetary juicing that the ChiComs have been doing at the behest of Western powers-that-be. The whole idea seems to be to turn China into a kind of authoritarian Western state, complete with Western-style corporatism but with a more docile and frightened population.

This is the only explanation that makes sense to us. Four hundred million Chinese regularly verge on starvation (close to it anyway) and the ChiComs worry about electric cars. The rural and urban peasantry are beginning to rebel with regularity, but the ChiComs plan ways to dispose of batteries as part of creating a "greener" economy.

This is the country into which Western investment is pouring. This is the country – this imitation of a free-market economy – that the great Western leaders of finance and industry find an exciting "new" industrial frontier.

These captains of Western industry … do they understand the full measure of Chinese authoritarianism and trickery? Do they understand the essential Potemkin-like nature of the façade they are supporting? And if they do … why are they doing it?

Why are they taking their shareholders' hard-earned money and throwing it into an economy where nothing is as it seems and the ChiComs control every aspect of the economy even though they pretend otherwise? How is this a recipe for success? Sound more like a recipe for civic UNREST.

We DO think there is a good chance the Western elites have in mind propping up a failing Chinese economy. Alternatively, they expect China to fail at some point – as we do – and are just making sure the West is fully engaged in the failure.

After Thoughts

Out of chaos, after all, comes order. And so … on failure and depression the New World Order is to be built. It certainly is not being built on a free market.

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