STAFF NEWS & ANALYSIS
Chinese Should Drop Cash Like Other Modern Economies
By Staff News & Analysis - May 02, 2013

Chinese Way of Doing Business – In Cash We Trust … Lugging nearly $130,000 in cash into a dealership might sound bizarre, but it's not exactly uncommon in China, where hotel bills, jewelry purchases and even the lecture fees for visiting scholars are routinely settled with thick wads of renminbi, China's currency … For all China's modern trappings — the new superhighways, high-speed rail networks and soaring skyscrapers — analysts say this country still prefers to pay for things the old-fashioned way, with ledgers, bill-counting machines and cold, hard cash. Many experts say it is not a refusal to enter the 21st century as much as wariness, of the government toward its citizens and vice versa. – New York Times

Dominant Social Theme: Cash is barbarous.

Free-Market Analysis: The globalists who are doing their best to eradicate so-called tax havens have apparently discovered that about a billion Chinese like doing business in cash.

Presumably, China is on the menu. The impulse is always the same for the globalists, and it is one of control.

In this age of full-scale paper money, governments really don't need tax revenues anymore. They can print as much as they want and central bankers swear they can sterilize those funds as necessary – so much of this exercise would seem to come down to one of tracking citizens' transactions.

Income taxes are a handy device from a control standpoint, as one is obliged to reveal every last decimal of one's holdings. And paying for things in cash interferes with that process.

Here's more from the article:

Doing business in China takes a lot of cash because Chinese authorities refuse to print any bill larger than the 100-renminbi note. That's equivalent to $16. Since 1988, the 100-renminbi note, graced by Mao Zedong's visage, has been the largest note in circulation, even though the economy has grown fiftyfold. (The country's national icon, Chairman Mao, appears on nearly every note: the 1-, 5-, 10-, 20, 50- and 100- renminbi note.)

… Following those paper bills as they course through this booming economy offers a fascinating glimpse into how China's financial system works, and how parts of the country remain stuck in yesteryear.

"In large parts of China, it still looks like the U.S. in the 1950s: most everything is in cash," said Jeffrey R. Williams, executive director of the Harvard Center Shanghai and a former bank executive who has worked in China for more than 30 years. "In the U.S., you might have one bill-counting machine at a bank, but here every teller has one."

Although China's coastal cities have flourished during the 30 years of economic prosperity, economists say the country's interior remains poor and disconnected from the more modern aspects of the financial grid. As a result, the poor prefer to do business in cash.

The rich also like to deal in cash, and they typically hide their money in the underground economy to avoid government scrutiny of their wealth. As was the case in other developing economies of Asia, easily traceable credit cards and checks are not commonly used.

"The average Chinese trusts neither the Chinese banks nor the Communist Party," said Friedrich Schneider, an authority on shadow economies around the world and a professor of economics at the Johannes Kepler University of Linz in Austria. "This is simply a mistrust of government. And so lots of people deal only in cash."

To keep a lid on the illegal cash transfers, China restricts cross-border money transfers and places limits on foreign currency exchange.

Understandably, printing all that money is a major endeavor. The China Banknote Printing and Minting Corporation runs 80 production lines with 30,000 workers, six bank note companies, two paper mills, a printmaking company, a plate-making corporation and a firm that produces special anticounterfeiting security lines.

Did you catch this line? "Economists say the country's interior remains poor and disconnected from the more modern aspects of the financial grid."

So paying cash is not modern? And gold is a barbarous relic? Notice any operative dominant social themes?

From our standpoint, anything that supports privacy is to be demonized by those internationalist forces that want full transparency – for us, not for them.

People are to be forced into an increasingly globalized economy and economic backwaters like cash and gold are to be washed away.

One can sense the disapproving tone. China is still backwards and will be until its citizens fully embrace modernity, and its trackable, digital money.

Only then will the Chinese economy mature and become more like other leading economies such as Spain, Britain and the US.

After Thoughts

Get with the program, China. Prosperity awaits!

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