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Chinese TV Host Says Regime Nearly Bankrupt

By Matthew Robertson
Epoch Times Staff
Created: November 13, 2011 Last Updated: December 10, 2011
Related articles: China » Business & Economy
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Larry Lang, chair professor of Finance at the Chinese University of Hong Kong. (Wu Lianyou/The Epoch Times)

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong. (Wu Lianyou/The Epoch Times)

China’s economy has a reputation for being strong and prosperous, but according to a well-known Chinese television personality the country’s Gross Domestic Product is going in reverse.

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. He coined the phrase: “In China, every province is a Greece.”

The restrictions Lang placed on the Oct. 22 speech in Shenyang City, in northern China’s Liaoning Province, included no audio or video recording, and no media. He can be heard saying that people should not post his speech online, or “everyone will look bad,” in the audio that is now on Youtube.

In the unusual, closed-door lecture, Lang gave a frank analysis of the Chinese economy and the censorship that is placed on intellectuals and public figures. “What I’m about to say is all true. But under this system, we are not allowed to speak the truth,” he said.

Despite Lang’s polished appearance on his high-profile TV shows, he said: “Don’t think that we are living in a peaceful time now. Actually the media cannot report anything at all. Those of us who do TV shows are so miserable and frustrated, because we cannot do any programs. As long as something is related to the government, we cannot report about it.”

He said that the regime doesn’t listen to experts, and that Party officials are insufferably arrogant. “If you don’t agree with him, he thinks you are against him,” he said.

Lang’s assessment that the regime is bankrupt was based on five conjectures.

Firstly, that the regime’s debt sits at about 36 trillion yuan (US$5.68 trillion). This calculation is arrived at by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion, he said). But with interest of two trillion per year, he thinks things will unravel quickly.

Secondly, that the regime’s officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang.

Thirdly, that there is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the Purchasing Managers Index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that China’s economy is in recession.

Fourthly, that the regime’s officially published GDP of 9 percent is also fabricated. According to Lang’s data, China’s GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in infrastructure construction, including real estate development, railways, and highways each year (accounting for up to 70 percent of GDP in 2010).

Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 51.6 percent, Lang said.

Once the “economic tsunami” starts, the regime will lose credibility and China will become the poorest country in the world, Lang said.

Several commentators have expressed broad agreement with Lang’s analysis.

Professor Frank Xie at the University of South Carolina, Aiken, said that the idea of China going bankrupt isn’t far fetched. Major construction projects have helped inflate the GDP, he says. “On the surface, it is a big number, but inflation is even higher. So in reality, China’s economy is in recession.”

Further, Xie said that official figures shouldn’t be relied on. The regime’s vice premier, Li Keqiang for example, admitted to a U.S. diplomat that he doesn’t believe the statistics produced by lower-level officials, and when he was the governor of Liaoning Province, he “had to personally see the hard data.”

Cheng Xiaonong, an economist and former aide to ousted Party leader Zhao Ziyang, said that high praise of the “China model” is often made on the basis of the high-visibility construction projects, a big GDP, and much money in foreign reserves. “They pay little attention to things such as whether people’s basic rights are guaranteed, or their living standard has improved or not,” he said.

Behind the fiat control of the economy, which can have the appearance of being efficient, there is enormous waste and corruption, Cheng said. It means that little spending is done on education, welfare, the health system, etc.

Cheng says that for the last decade the Chinese regime has accumulated its wealth primarily by promoting real estate development, buying urban and suburban residential properties at low prices (or simply taking them), and selling them to developers at high prices.

According to Cheng, the goals of regime officials (to enrich themselves and increase their power) are in direct conflict with those of the people--so social injustice expands, and economic propaganda meant to portray the situation as otherwise prevails.

Few scholars inside the country dare to speak as Lang has, Cheng said. And that’s probably because he has a professorship in Hong Kong.

Correction: The article misstated the individual tax rate in China. The correct rate is 51.6 percent, according to chair professor of Finance at the Chinese University of Hong Kong, Larry Lang. The Epoch Times regrets the error.



  • Anonymous

    Absoloutely amazing..logical&frightening in a way, but amazing as to the point, that the “chinese way” is sold us Germans- who were and are beeing forced to sacrify our (former world reserve-)currency, economic growing and eventually private savings to this da…bl…fu..d EU-Totlitarism- as a bright future, of course thus ignoring all independent experts/scientists, the german constitution, the success-story of the “Bonner Republik” from 1948 to 1998 and the crucial and original ideas and values of an Adenazer/deGaulle “Europe des patries” or “Europe of nation states”, where democracy has been borne and is beeing preserved and where prosperity belongs though to the fittest but is chared and transferd according to fair and resonable mechanisms, not controlled by Neoliberalism and Hedgefonds.
     
    Thanks, indeed
     
    Marcel Gruss
    Wuppertal 

  • Alex A

    I bet Professor Lang holds British citizenship, otherwise a Chair (professorship) in HK is no warranty to his job and other security.

  • Anonymous

    I see no difference between the military dictatorship in China and the plutocracy that runs Wall St. and the US Government from the shadows. Their methods are very similar, just called by a different name and explained by the same BS propaganda and backed by force. The USA has stopped being a free nation bit by bit since the time of John Kennedy.

    • Anonymous

      Per U.S. Treasury Data, the top 0.1% pays as much in taxes as the bottom 80%.  Americans rarely consider that the taxes of the super-rich make their comfortable lifestyles possible, and for some reason don’t consider the benefits of libraries with public Internet, roads, and an energy infrastructure that actually works.  Americans who don’t like their regime can get to Mexico with bus fare, where the median income is in the world’s top 20%, if they want to live in a regime where there are few billionaires to be taxed.  Even collecting food stamps alone places  Americans in the world’s top half.  American  bourgeois are whiners of the first rank.

    • Gili Shiffman

      here’s the difference…. If you were in China, your post on this forum would disappear, as would you.

      • http://twitter.com/funken_a Daryl Pienta

         and here they allow the in fighting between groups so they can feed us more BS that keeps us at each others throats… When it all comes boiling down is we will kill each other why those 1%’ers skip town and go unscathed

      • http://pulse.yahoo.com/_2LSFN3USR5M5ULBQ467DHCXV2A The Ben Bernank

        Only a matter of time before that comes to the US.  China does not have police military vehicles and pat downs at airports.

        • Anonymous

          China has military EVERYWHERE. You just don’t see them all.

          • liangmi

            Completely false. The USA has 11 aircraft carriers with massive military power projection. Who has a counter to that and what is it?

        • http://pulse.yahoo.com/_M57PI6PDIDYN5DVPHBR4PAVWMQ J

          huh?! China doesn’t?

        • Anonymous

          You’ve never been to China. China has a very developed, professional and fairly high tech spy/police state network and there are cameras EVERYWHERE in cities. They also have mobile death squads for people to be killed as they’re sentenced to death from the courthouse.

          Many people like you like to make these big proclamations about the USA and it’s impending doom, but you seem to lack a core understanding about the USA’s economic foundations (the Mississippi River system/connected to farm system – the richest farmland and best river system in the world for logistics, which allows for consistently cheap food and then people can worry about other things, like technology and finance), our control over our currency & economy (we have one finance authority, The Fed, unlike the EU, and the US Dollar is still the most stable currency in the world – 40% of all transactions in the world are done in USD) and our political foundation…Most countries would have illegally imprisoned the OWS people, they were removed and most of them are on the streets now. We have changed political parties more times without violence than any country in the world. The US Government is the longest standing government in the world, and on and on and on…

          • Anonymous

            Actually, there are lots of instances throughout history of strong republican governments surviving much longer and enjoying much greater prosperity and affluence than the US.  The Roman Republic lasted 500 years before degenerating into a democracy, a military industrial empire and finally collapsing.  At the time, the affluence and global influence Rome enjoyed was 100% comparable to that enjoyed by the US today – yet the Empire collapsed anyway.

            There are hundreds of historical precedents that demonstrate clear as day that when a society grows decadent and racks up debt to pay for social programs and war – their economy and civilization destroys itself.  It’s an interesting time to be alive, since almost every developed nation in the world is doing just that, and there’s no reason to believe any of them (including the US) will not meet up with the same fate that every nation in history has met when they went down that route. 

            Feel free to disagree.  If you do, I’d suggest taking your life savings out in US dollars and hide it under your mattress.  If well established American financial institutions like MF global can go belly up, any American financial institution can.  Come back and see how much purchasing power those US dollars enjoy 10 years from now.

          • http://justen.us Justen Robertson

            Aaaah, your denial is delicious. Unfortunately reality doesn’t much care what you want to believe. The US does illegally imprison people, by the by, and tortures them (you may have missed the Guantanimo and Abu Ghraib things) and it “legally” imprisons around 75% of ALL the prisoners in the entire world. That is, if your math is weak, much more than China, despite having less than 1/3rd its population. The US president claims the right to order the assassination of his own citizens. Whether or not he’s actually doing this is up for speculation, since any such order or actual execution would fall under “national security” exceptions to the Freedom of Information Act. Similarly, the US senate just overwhelmingly approved the elimination of habeas corpus. We’ll see how that goes in the house, but I’m not feeling very optimistic, are you?

            The agricultural system in the United States is a disaster area. What was once, as you say, the richest and most valuable farmland in the world is now thoroughly depleted and poisoned from overutilization and overapplication of fertilizers and pesticides. Hilariously, the pests and weeds are developing resistance to the pesticides at the same time the soil is becoming inhospitable to the intended crops. Yields have been down year after year after year for decades. The Mississippi sewage conduit is so toxic that the ocean waters around the delta are completely inhospitable to life. The fishing industry is on the verge of collapse.

            Oh yeah and we should probably bring up the much-vaunted US infrastructure which, as a PBS docuemntary from back in 2007 or 2008 pointed out, is in desperate need of over 2 trillion in maintenance that has been neglected for the past decade (can’t recall the title now, but it was Frontline and you can probably still watch it on their website). that’s just to keep it going at its current state, let alone to expand and modernize it to the point that it’s competitive with more advanced nations.

            Freedom of speech. Yes, you still, marginally, have the right to complain in the US. You’d better hold on to that with the same level of desperation you’re in denial about the rest of it, because literally dozens of bills and treaties have been introduced (and in some cases passed) in the past decade to curtail those rights too. Pretty soon they’re going to be gone. And it’s because of people like you, to be frank, people who are willing to engage in nonsensical nationalist thinking of the kind you just shared with the rest of us. You have the government you deserve. Soon, you’re going to have the poverty you deserve, and the suffering, and the inhumanity. I am not going to pity you. I do feel a little guilty about that, but I can’t find it in myself.

          • Anonymous

            Another conspiracy theorist or 50 Cent Party member. You guys are cute.

            I’m curious, what are you thoughts on this: http://www.youtube.com/watch?v=6_eqWOYockc. China has way more on it’s plate than the America in the coming future: a spoiled youth that won’t be happy to work hard labor jobs for low pay and are largely unemployable due to unrealistic demands, a massive graying population, 800 million still living in abject poverty, one of their major exports buyers crashing (EU is toast), oh yeah… POLLUTION, that thing you tried to say the US is suffering from (http://eoimages.gsfc.nasa.gov/images/imagerecords/53000/53490/S1999324040624_md.jpg)… China’s is visible from space. Really, I could go on.

            You tell me, who is the next world power? What is the next world currency? Who has the next navy that is going to dominate the blue ocean? I’m sure you don’t have answers for these, because nobody is going to displace America in these arenas for a long time.

            Please tell me more about America’s horrible infrastructure and agriculture, wait I can’t hear you over the sound of USD $14.58 trillion (our recession economy… which is still more than 3 times that of China’s, with about 1/5 the population of China).

            And, if America were to have a dictator, I’d assassinate his ass myself.

            I didn’t know there were American born 网评猿, sad.

          • http://justen.us Justen Robertson

            Conspiracy theories? @.@ This is well-understood public information.

            Re: infrastructure, FFS, it’s Frontline. It’s practically straight from the horse’s mouth. This isn’t some nutty late night talk show nonsense, this is reality. You might want to think about facing it. Same goes for imprisonment. It disturbs me that you’re ignorant about these things and yet feel the need to opine about them. Welcome to the age of Google; ignorance of reality is not an excuse.

            Re: pollution, I don’t think you quite understand that pollution is not just an international dick measuring contest. Yes, China is in bad shape. I don’t recall defending China. I recall criticizing your rosy view of the United States. Being less polluted than China doesn’t earn a merit badge. If you can only define your level of pollution by claiming it compares favorably to China, you may have a serious problem.

            Re: dictators, you’d better stock up on ammo and spend some time on the range. Or just keep redefining what you think “dictator” means to exclude all of the insane things US presidents already claim the right to do. Indefinite detention, summary execution, secret assassinations, torture, this became the norm under the Bush administration against foreign enemy combatants; now Obama has extended that to US citizens. This is the kind of thing that normally defines a dictatorial regime – the elimination of due process of law and abandonment of civil rights and basic human dignity.

            Again, this isn’t “conspiracy theory” stuff, this is public knowledge. I don’t know if you haven’t bothered listening to the news for the past 6 months or what. This accusation of “conspiracy theory” baffles me. I’d understand if I had said Obama was a lizard man from outer space or something, but I frankly don’t know what you’re on about. This is not unsubstantiated rumor. @.@

            Who is going to emerge as the next world power? That’s a really good question. I can’t predict the future. All I know is the current ones are all in serious trouble. I know that they each have a bunch of nuts, assclowns, and navel-gazers in charge that have demonstrated again and again their utter incompetence and inability to look beyond the dollar amount on their next “consulting” check. We’re talking about people who don’t see a problem or conflict of interest in relabeling pepperoni pizza a “vegetable” product for the purpose of school nutrition, ffs. They’re not just intellectually dishonest; they’re not just corrupt; they apparently don’t even care what we think anymore.

            I’m not even sure what to make of that last line. Chinese idiom? I’m not sure what that’s supposed to mean.

          • http://justen.us Justen Robertson

            Oh! Right! Pollution visible from space. I’m getting a 404 on that link you sent, but yeah, if you look at images on Google earth you can see the brown-gray muck spewing out of all the major river deltas in the US, too, spanning hundreds of square miles. Those are packed full of “dead zones” where no advanced life can survive due to toxicity and lack of oxygen. Yes, China’s are even worse, but that’s not a defense of the US, that just tells us how incredibly hosed they both are.

          • Anonymous

            How much of the US economy is driven by debt monetization by the central bank?  The government issues treasuries, the central bank (the Federal Reserve) buys them with currency they create out of thin air because no one else will.  

            The interest bearing treasuries are then added to the Feds balance sheet and they loan out the revenue they collect on those treasuries (complements of the American taxpayer).  The recipients of those loans are the Fed’s their associate banks – including to dead beat, bankrupt European banks that support unsustainable European governments.

            The associate banks that receive those loans at 0% interest from the Fed then speculate on unsustainable junk investments, like European sovereign bonds or mortgage backed securities.  If these banks go bankrupt in the process, they get bailed out by the Federal government who in turn has to issue more treasuries for the central bank (who created the problem in the first place) to monetize.

            US citizens HAVE to pay taxes to the Federal government to pay the interest on treasuries (debt obligations) owned by foreign nations and worse, a multinationally owned central bank (the Federal Reserve).

            Give 5 minutes of thought to that and ask yourself how is that system in any way sustainable?

            I’m not American, but I have a great deal of respect for freedom loving Americans who don’t want to live as tax slaves to a crony capitalist system where the super rich don’t bear responsibility for their actions because the government bails them out at the expense of the populace.  I sense in a large portion of (but a decreasing) of Americans is the desire to live in a free society, with free markets and personal liberty – but when you see the infringements on guaranteed personal liberties by the state and corporate monopolies – you have to wonder when the vast majority of Americans realize they are living in a fantasy world and are slaves to tyranny.

            The US became a powerful nation because for the first 130 years of it’s history, it avoided these detestable practices (which are the hallmark of managed, totalitarian regimes – including Communist China).  Will the US maintain it’s prosperity, or like every great empire in human history, will it just serve be relegated to the dustbin of history as a great empire that imploded on itself due to apathy, greed and corruption?

          • Anonymous

            You are welcome to leave the country, or stay out as the case may be.

          • Anonymous

            Good comment, but we are a very young nation. Other civilizations have survived for thousands of years. We need to be very cautious to preserve our political system and to keep crony capitalism from destroying it through overspending and corruption from both major parties. On the other hand socialists would have us destroy our economy and our sovereignty also.

          • Fipster

             ..exactly how is it that the US Government the longest standing government in the world when the US only came into being in 1776…?

          • liangmi

            Tell me the NEXT OLDEST GOVERNMENT. Yes, government, not nation. Google it. I will wait.

      • http://twitter.com/ruhiyaman Ruhi Yaman

        This is a disingenuous response. China is not a Western style democracy and it does not pretend to be. The US claims to be a true democracy but people have little say on big policy issues and reporting by the mass media is woefully one-sided and elite-driven. You get infinitely less biased reports from the English version of China TV News (CBCTV) than you get from Fox. I live and work in the region. Perhaps, those know next to nothing about how things really are in China should say next to nothing…

        • Anonymous

          The US is not a democracy, it’s a republic.  Contrary to popular opinion, China is actually a democratic country as well – there’s only 1 party, but there are still democratic elections there.  The problem is democracy with it’s the false belief that by voting for something or someone, all problems can be magically solved.  This is pure nonsense.  

          The problem with both China and the US is they try to be democracies instead of republics.  In the process they end up being governed by self-centred plutocrats, the Communists in China, the Federal Reserve in the US.

          • Anonymous

            Democracy is 2 wolves and 1 sheep voting on what to have for lunch. We lost The Republic when Law became who you know and only applied to the sheeples,not the ruling Progressive elites of Both parties.

          • Anonymous

            Since when in THE HELL did China try to be a democracy? Have you ever been to China? These democratic elections are nowhere on the scale of influence or importance for China to be considered a democracy. AT BEST they are a Gerontocracy.

            Please tell me you’re not a right wing conspiracy theorist. Don’t buy into The Fed running the government through the elites and Illuminati. I don’t want to get into it, unless you are, but that stuff just does not hold water… at all.

          • http://justen.us Justen Robertson

            It’s kind of funny that you insist that democracies aren’t silver bullets to solve societal problems, then you turn around and suggest that republics somehow are. I have a hard time understanding how introducing middlemen in the democratic process magically transforms it from unwieldy and underperforming to effective.

          • Anonymous

            A republic is governed by the rule of law, not by the rule of the electorate (or of “middlemen” as you put it).

            In a democracy, the rule of law can be abrogated by the democratic process.  In a republic, no one is above the law – regardless of the will of the majority or position within government.

            Just because a majority says something that is wrong is right, doesn’t make it right.

            Thus, unbridled democracy is an enabler for totalitarianism, as, if the majority believes something absurd is justifiable, like the genocidal annihilation of an ethnic group, the democratic process allows for it.

            Conversely, in a republic, or any system governed by the rule of law (also known as “Liberal Democracy” or “Constitutional Democracy”), the will of the majority only extends insofar as the the law allows it – ensuring guaranteed rights and legal due process.

            Democracies ALWAYS degenerate into popularity contests whereby those seeking power promise to do what is popular, instead of what is right.  That is why pure democracies always collapse.

            Liberal or Constitutional Democracies (which include Republics) do not allow for unbridled, unmitigated power as a result of the democratic process, but allows for the democratic process as a selection process for administrators and executors of the law, but who’s status as elected officials do NOT transcend it.

            That is why the only system that allows both universal prosperity and liberty (as best demonstrated by the US up until 1971), in the case of the US, is the Republican system.  It’s unfortunate that most members of the US Republican party don’t embody this principle (with the exception of Ron Paul).

          • http://justen.us Justen Robertson

            “A republic is governed by the rule of law, not by the rule of the electorate”

            “Liberal or Constitutional Democracies (which include Republics) do not allow for unbridled, unmitigated power as a result of the democratic process, but allows for the democratic process as a selection process for administrators and executors of the law, but who’s status as elected officials do NOT transcend it.”

            It’s almost cute that you believe this, despite all of history in evidence to the contrary :) Pieces of paper, however eloquent the ink thereon, do not restrain the criminality of con-men; nor is the electoral process (or its participants) competent to ensure that con-men are not chosen to uphold these eloquent rags.

            I feel like I’m talking to a Marxist espousing the virtues of the worker’s paradise. “It was a good idea in theory, but people messed it up!” ROFL. You know, outside of politics, theories that don’t hold up to evidence in reality are regarded as failures. Only in politics can a process or system meant to apply to humans that doesn’t work when there are actual humans in it be called “good”.

          • Anonymous

                 USA is a democratic republic,hence a democracy as we now use that term.  So is the Republic of China on Taiwan, whose example of freedom and prosperity scares the hell out of the Communists in Beijing. since it shows the people of China what their lives could be like if they had real democratic freedoms as their fellow Chinese on Taiwan do, as we descendents of all races do here in USA.  Beijing is what it has always been–a brutal, murderous one-party dictatorship of the Communist Party ruling in its own interest, pretending to be the ‘vanguard of the proletariat building socialism’-which not even the party members believe anymore. 
                 Let the Chinese have genuine free speech, political parties, and honest elections, and see how fast they become like Taiwan–which is why the CCP is going to invade Taiwan as soon as they have a military that matches the USA.  Invasions of Vietnam, S. Korea, Phillipines,and even Japan, India and Australia will follow–complete with use of nuclear weapons, especially neutron bombs. 
                 The only alternative, to preserve world peace, is to bring about the overthrow of Communist Party; it’s a race between that and World War III.   I have relatives in both Taiwan and mainland, where I do business  with many party members–I know what I am talking about.

        • Noel Ma

          Fox? Try CBS,ABC and NBC. Many Dan Rathers there. I was born and raised in HK and I still read Chinese news daily.

    • Anonymous

      There are some differences.  Here’s one:  If you are an American subject – er citizen – you may freely leave the country if you wish (albeit after searches of your personal effects that are not nearly so onerous as those if you were to seek to enter and limits on the assets you may carry).  You may remain subject to tax claims by its treasury on your worldwide income but for now you can still go.  Excluding HK and Macao for now, exit from the PRC requires a government chop or two.  Imagine that.  Born behind the stockades.

    • Anonymous

      Yeah, occupy Tiananmen worked out so well

    • Anonymous

      Ours is out in the open, calling itself the Federal Reserve. We just won’t do anything about it.

    • Bdeholl

      Why since Kennedy?

    • http://pulse.yahoo.com/_3G2CG2JSANGFM4IXHFHPIQGYOA Steve

      Sure, and the reason why J. is the Baking Elite. Taking out Kennedy over his coining of his own money!

    • Anonymous

      I wish you could live the average lifestyle of China for a year, and see if you still think that way.

  • Anonymous

    What’s going to happen to the price of gold when China starts selling their reserves to raise cash?

    • Anonymous

      Will not
      happen. Gold is a hard tangible asset and there is no eminent need to sell.

      Much simpler
      to manipulate paper – that is the Chinese can raise “cash” by merely manipulating
      the value of the Yuan in relation to other world currencies (ie the USD).

    • http://www.facebook.com/people/Jorge-Emilio-Emrys-Landivar/37403083 Jorge Emilio Emrys Landivar

      They don’t have to sell.  They can use it as capital for money printing.

    • dutchs

      I hope it plummets and bankrupts all the gold hoarders.

      • Anonymous

        I listened Prof. Lang’s record and read his lectures on this subject. I trust him very much. He is a real economist. I also read Prof. Xie’s article on this subject.
        Both are telling truth!
        The bubble will be burst soon.

  • Anonymous

    Not good news. Not good at all.

  • http://twitter.com/DamianLewis719 Damian Lewis

    Who are we going to borrow the next trillion from?

  • http://profiles.yahoo.com/u/GTWW5A7R5VGLQNGMPQ3OMH5CJ4 egoist_capitalist

    Is it possible (let alone likely) that a culture of DVD / software copiers and product knock-offs is an indicator of the state of corruption and #s-hiding within its government? From what I know about the common Greek (corruption an important tool of survival), it’s no wonder that it permeates all of the way up to the state’s balance sheets. 

  • Anonymous

    Two words:  He’s toast.

  • Anonymous

    Cheng lost cred with me when he complained about low levels of spending on education, welfare, the health system. As if more socialism would help a country already run from the top down. Top down is top down no matter how you look at it. There is little difference between a greedy dictator and one who will dictate to you for your own good. In fact, the latter is worse, because, as C.S. Lewis said, he does so with the approval of his own conscience. The ‘beneficent’ dictator will continue to double down on his bet that he is doing good, the greedy dictator will just run out of your money and his minions will turn on him.

    • Anonymous

      like Teabaggers?

    • http://www.facebook.com/people/Christopher-Murphy/100002542412074 Christopher Murphy

      So any spending on education or health equals sociailism?

      • gary1961

        Yes Chris, it does.

  • dutchs

    Classical evolution of a Chinese dynasty: starts off reformist, ends up entrenched and corrupt. At least the robber barons of the 1890′s produced steel and oil.

    • Anonymous

      “The empire, long divided, must unite; long united, must divide. Thus it has ever been.” Luo Guanzhong

      In the past the peasants started the rebellions that brought down dynasties. Peasants are still an overwhelming majority in modern China.

      • http://twitter.com/funken_a Daryl Pienta

         and the USA

  • http://twitter.com/RKHilbertSpace Brandon Smietana

    This article claims that the recording of the lecture is available on Youtube, but does not include the link.  Search on Youtube does not return the lecture.

    Why does the article fail to link to the source material.  Please provide the primary source.

  • http://twitter.com/motionview motion view

    Kudos to Professor Lang for his courage and I hope he survives the trouble headed his way.  The Chinese academics are about to get a rude lesson in what tenure means in a totalitarian society.

  • Keng Tan

    China has a GDP of 38 trillion yuan and even if what Larry Lang said is true then China’s debt over GDP is 95% versus 234% in Japan, 111% in the US (15.5 trillion/14 trillion x100).

    If China, which has US$3.5 trillion in foreign reserves is a bankrupt why is that the US and Japan are not even when their debts over GDP ratios are much higher and the US has practically no reserves? The US has a burden of about US$55 trillion liabilities covering Medicare, Medicaid and Social Security and yet it is not a bankrupt.
    The reason why Italy (120%) and Greece (139%) are in trouble is because their debts are denominated in euros and they cannot print euros to service their debts. The debts in US, Japan and alleged debts in China are denominated in local currencies and unlimited amounts can be printed. Ask Helicopter Ben !

    The other fallacy is that China’s corporate tax is not 70% but 25% and the tax for individual is not 81.6% but ranges from 5% for those earning up to 500 yuan a month to 15% for those earning from 2001 to 5000 a month which is the average for most workers. The top individual tax rate is 45% for those earning 100,001 yuan and above a month and you won’t find too many individuals in that category.

    I shall take Larry Lang’s data with a large pinch of salt now that the IMF has given China’s financial health a thumbs-up.

  • Anonymous

     Even now, after all of the facts are readily apparent and available, it seems that few people in the West are willing to believe that China is in worse economic condition than ourselves.

  • Oliver Manuel

    I certainly hope Dr. Larry Lang is wrong.

    But something is seriously wrong with the scientific, economic and social order worldwide, and many indications that citizens have lost control of their political leaders.

    With kind regards,
    Oliver K. Manuel
    former NASA Principal
    Investigator for Apollo
    http://myprofile.cos.com/manuelo09

  • Anonymous

    My brother and sister-in-law are leaving their work with an NGO in China this month, as China is making it more difficult to get visas.  I understand another friend of theirs spent around $70,000 U.S. rehabbing an old house in Shangri-La…a month after they finished the Chinese Government informed them they were kicked out and the Government would be taking the property to sell as a hotel.  There is quite a difference…

  • http://atlantarofters.blogspot.com The Sanity Inspector

    When the regime starts lying to itself, then they are well & truly out of touch.

  • Anonymous

    Mr. Lang’s points are well taken and I think a lot of what he says is reasonable and should be given serious consideration, but its never wise to trust only one source. You never know where their real loyalties lie.

    There may be many additional correct answers to situations Mr. Lang refers to in China. We travel there almost every year and have noticed the Yuan/HK$ has changed. We get 6.4Yuan per $USD and 7.8 HK$ per USD. Before, the change rate was 7.9Yuan per $USD so our China purchasing power has declined.Our brother in law in Shanghai owns a shipping company and stated that his tax rate is between 5 & 10% depending on the relationship you create with your tax guy.Having traveled extensively in China, mostly Guangzhou province, we observed that a lot of the manufacturing is for export goods (Walmart imports incredible amounts of Chinese goods and has huge Walmart stores in major cities there), and a lot of that is building materials or every sort. Some cities specialize in specific types of goods. One city we visited had 450 marble/granite/stone manufacturing companies, another had several city blocks of furniture upholstery and office furniture parts. It was just mind boggling. Various municipalities have built showroom centers for their manufacturers, and rent out showroom space. Some centers, larger than Ala Moana Shopping center, showcase hundreds of manufacturers that make one product – ceramic tile, for example, or Chinese antiques, or any number of other products that area specializes in. There are warehouses hundreds of yards long crammed to the rafters with Chinese [antique] furniture, and hundreds of other factories that make every product you can imagine.There are miles and miles of cultivated pine forests, out of which a good percentage of the the furniture made for local consumption (and Hong Kong, too) is made.We imported several containers of goods a few of years ago, and we learned some valuable lessons:1. Our first choice is to buy American made goods because we trust them, and they have enforceable warranty programs.2. Some Chinese manufacturers do not care about quality. Some will ship you faulty or just plain poor quality goods knowing you can’t send them back. 3. By and large, Foreign-owned Chinese factories make good products.4. We’ve also hired Chinese immigrant laborers for various jobs and found that many (not all) have no desire to do a good job as we define it. Only about 30% that we’ve hired are good workers, so we’ll not be hiring them any more.5. Happily, Americans by contrast DO have an innate desire to do quality work. They are conscientious and they do good work.Many of the Chinese workers live at the factories in average 4 story dorm building where their entire families live – usually man/wife/child, and many single or geographically single adults.The only reason they’d need to go off the factory property is to buy beer and cigarettes. All other items including food, are supplied by the employers.Millions travel to their remote villages once per year to see their families and many of these people see their children only when they return to their villages.As you can see, life in China is really different from the US. The government can do what they want with little delay and no say-so from the people. We understand from some that the city governors are required to make city improvements each year – some sort of notable project, and a big municipal project every 5 years. No idea if this is fact, but Chinese cities seem to be under some sort of construction all the time.By the way, I observe that there is much less obesity there and people seem to keep personal health at the top of their minds because we understand that if they get sick and have no money, they get no treatment – so they have to stay healthy and by and large, they do.We could learn from them in this regard.In any case, Mr. Lang’s comments may hold water, and he seems to be a source of information that is largely difficult to come by regarding China. Added to other sources of information coming out of China, its possible to get an ever more accurate picture of their real situation.

  • http://pulse.yahoo.com/_JZ5HL6SGXRWK24JHDOPZ7FINS4 Zimriel

    He lost me when he cited that Holy Trinity of statist propagandists: healthcare, education, and welfare. The more government spends on that crap, the worse they get – which is why they’re such lovely cash cows. The article didn’t throw in global warming, but that much was probably in the etc.

  • Anonymous

    The only way out I can see for this regime is War.  They need oil for their War machine and have none.  They will eventually attack the West and move to get the oil reserves.  America has been steadily doing just that but in little bite size pieces since 1979.  We know the oil will run dry soon, we want to be the ones controlling the spigits.  Now we are in Nigeria and Libya our newest conquest of the oil reserves.  China and Russia arn’t gonna sit back for much longer and a looming debt crisis and collapse is also facing the US and the EU.  Looks like the perfect storm.  Have you set some provisions to the side? 

    • Anonymous

      They might go as far as seizing the Parcel Islands, but if they did, they might get boycotted, and go broke immediately.

  • Anonymous

    China’s got one thing working for them, they make it difficult for their corporations to fire domestic workers and move jobs overseas.  The US might want to check that out sometime.

  • Mike Lee

    Well, we pretend that the numbers put out by the USA are legit (e.g. CPI and unemployment) – so why not pretend that the laughable data released by China is real? It’s ALL pretend, folks. One big illusion. Mark-to-fantasy. The sad part is that a communist nation like China is pretty much the same as a supposed democratic nation like the USA in many respects. Is the media really all that different? The US MSM, for the most part, regurgitates whatever it is fed by either party. They are in bed with the elites. They know the same people, go to the same schools, the same parties. They have no interest in telling their readers/viewers the truth.

    • Anonymous

      Correct.  The US has turned inflation figures into a total lie by removing the true gage of inflation from the figures so we pretended, for the last decade, to have little to no inflation while true inflation rose by nearly 100% so prices for things people need to survive have literally doubled and trebled.  The price of assets owned by people have fallen.

      This is called ‘stagflation’.  Only, back in the seventies, the inflation figures accurately gaged true inflation so we had high interest rates.  Today, we have low interest rates and raging inflation.

      http://emsnews.wordpress.com

  • http://www.facebook.com/profile.php?id=1165286632 Chris Hughes

    I hope this guy packed up and got out of Dodge.  Otherwise, he has probably already reported for “political re-education”.

  • http://pulse.yahoo.com/_2LSFN3USR5M5ULBQ467DHCXV2A The Ben Bernank

    Did he mean China or US?  I guess there is no difference…every province in China is like every state in the US.

  • http://pulse.yahoo.com/_SUBTYPPFPNHXG7A6SOPR247AFM WestCoastCanuck

    BOB PAULSON = CANADIAN ARMED FORCES
    http://www.waterwarcrimes.com/newest-developments-blog—breaking-news—follow-ongoing-developments-here.html
    Elliott’s replacement, Commissioner Mr. Bob Paulson began his career in the RCMP after spending seven years in various undisclosed positions in Canada’s armed forces. 
    Paulson  joined the RCMP, in Chilliwack, British Columbia, where Canada’s largest west coast army base was then located and his first assignment was to the RCMP detachment in the Comox Valley where Canada’s largest west coast air base continues to be located. 
    There are some insiders who believe that Paulson was a covert Canadian Department of Natioanl Defence intelligence agent infiltrated into the RCMP which may exaplain why his early assignment was to a community where the Department of National Defence could keep an eye on their asset as he learned the ropes in the RCMP. 
    The Canadian Defense Serurity Establishment, something like the NSA, in the United States, has been eavesdropping on RCMP activities since the early 1950′s and it was obvious, by 1993, when Paulson joined, that the corruption inside the RCMP was out of control.    
    http://www.waterwarcrimes.com/newest-developments-blog—breaking-news—follow-ongoing-developments-here.html

  • Michael Freeman

    First of all, we need to immediately give Professor Xie an exit visa to the USA. I am sincerely worried for his safety after making those statements! I lived, worked, and traveled in China for 6 years. I agree with his speech. My ex-fiance’s family was the victim of an illegal land grab. They took her family’s home. The two subsequent neighborhoods that she lived in were also razed to the ground in illegal land grabs. I can also vouch for the fact that building and real estate projects are everywhere. You’ve never seen so many cranes in your life as you see in China. I also know that the peasant farmers have traditionally been overtaxed to the point of not having enough to eat. The fact that China has no free press means that there is no balance of power. Corruption is rampant beyond belief. I only hope that when the old Mao era party leaders die off, things will get better. At the same time, my fiance decided not to come to the USA after I spent
    a year helping her to get the K-1 visa. That is absolutely unheard of
    in China. Everyone wants to go to the US! To me, that said that China is
    becoming more prosperous. Her parents went though starvation during the Great Leap Forward and all
    of the horror of the collectives and the Cultural Revolution. Her mother had to hide her 2nd pregnancy and give the baby away to people in
    the countryside.The children born after the Cultural Revolution haven’t suffered. They consider China a developing country, but they are proud to be Chinese. I was disappointed to read this article. As much as I fear China getting stronger due to the bad politics and practices of the regime, I don’t want to see the Chinese suffer again.

  • Anonymous

    All we hear is criticism and people talking smack sometimes against their own country.  No progress can be made based a negative thought proceses.   In order to propose a solution for the world financial crisis it is essential to have a positive suggestion and to have a solution that is practical in mind.   If money was not worshipped, then the real economy, which is about productivity per head per square kilometer, would be what we should be aiming to increase.   We have to increase the energy flux density of the power sources we will depend upon to make it easier for people to advance production based on tecnological and scientific research and development.   To this end we need to refund NASA so that we can collaborate with China and Russia who are demonstrating that they are advancing into space related projects.   We need to reinstate the Glass Steagall standard over again to put a firewall between commercial financial dealings and the gambling den.   The recent collapse of MF, when  Corzine crony of Obama CEO oversaw the disappearance of 600 million dollars worth of private investors money, and to cap it all, the courts ruled that the clients were only entitled to about half of their deposits and everything else was frozen.  This typeof activity is not helpful as Hillary Clinton would say, and rising super powers like China are becoming discouraged to see the USA which is meant to be the leader and example of how the World propspers, and therefore speeches like the one in the above article will surface.   It’s not only the Chinese who are cast down, Americans are broke busted and disgusted.   Mr Wang Dang Flumpot Doodle should be pushing for the reinstatement of Glass Steagall globally and calling for the resignation of President Obama.  That would be a positive step in the right direction if we hope to get the world economy going again.

  • http://profiles.google.com/stephanluclarose Stephan Larose

    This global credit crisis has been scientifically created (and predicted by many to be coming for decades), and is the logical end result of a privately owned, debt-based, fractional reserve monetary system. During these challenging times, citizens of the world will have to do their utmost not to fall into the trap of being pitted into competition/aggression against each other, but rather, to increase democratic control, accountability and transparency, especially in the financial system and over corporations. Democracy relies on the vigilance of citizens to function, and so we must all engage in the process much more vigorously. Change always comes from the actions of individuals, so start a third party, write to your newscasters and editors and criticize them, pressure your elected officials, the system still operates on consent, it’s not as hard as some think it would be to change. 

    I think the highest priority should be the changing of our monetary system. I highly recommend you all see Moneymasters. Our national banks (like the Fed) print money out of thin air and loan it to governments at interest, this is legal counterfeiting and an incredible drain on resources. National moneys derive their value from the assumed productive potential of their citizenry, therefore, the citizenry ought to own these institutions and be direct shareholders. Not a tiny, select group of banks and individuals, but the citizens of the country the bank is meant to serve. National moneys should be printed debt-free. Inflation can be controlled by controlling leveraging and fractional reserve ratios, as well as through other devices like time-limited bills that can be retired from circulation after a set period, taxation etc. The abolishment of the debt-based system would free nations from their national debts, thus negating any need for income taxes. The resources this would liberate would be enormous. Again, see Moneymasters.

  • Anonymous

    China has a Communist Government in charge of a Capitalist economy, with such a schizophrenic situation, it was always just a matter of time before the crash. I think it’s going to be a very bloody crash as well, and wouldn’t be surprised if something like the French Terror with monsieur Guillotine wasn’t a part of it.

  • Progressive Republican

    The similarities between the situation described above and the Greedy Oligarchic Plutonomy advocated by the Republicons is truly frightening. It’s a shame that so few American citizens and politicians are aware of this situation. Forewarned is forearmed, but if you’re blinded by the cult of “American Exceptionalism” facts and reality won’t sway you. Until it is wayyy too late. Oops.

  • http://www.facebook.com/profile.php?id=1361477795 Marc Conder

    I find many of the comments curious, particularly those who draw straight line comparisons between chinese oligarchs and american bankers.  While I concede both make money, and try very hard to keep it for themselves and family, there are notable differences.  Were one to live in modern China, to even gain a job of import with in the state, one must have family connection to power, at some level. To end up in line for real power, you must be related to those who have held real power previously.   In the USA, a major difference. Forbes magazine has kept a running watch on those with spectacular wealth. This year, as many times before, more then 70% of our ‘billionaires’ are self made. Men and Women, from the bottom, have managed to rise to the top of the economic heap, on their own so to speak. Jwentz1, for example, has made american opportunity synonymous with communist class warfare.  Jwentz1 has either attended the public school system in american, dominated by union teachers who misrepresent facts routinely, or never learned criticle thinking. American rich have made it to the ‘top’ by providing something, the american people wanted. Only in the very recent past has an american attempted to force the american people to buy something, or be charged, fined and even having belongings taken from them for not purchasing. Barack Obama has learned the socialist way of doing business. Those of us who have been around since Kennedy know the difference.  

  • http://www.facebook.com/profile.php?id=100000303879569 Nanette Gray

    And if Obama and his minions and ‘puppet masters” have their way we are going down the same road..which we are further down than anyone really knows. If you think that OWS is not orchestrated, and the events around the world, think again and start digging! The big push for a One World Government and currency is on it’s way, but you have to bring America down first! We are about to lose our sovereignty!!! 

  • http://www.facebook.com/joel.vannattajr Joel Vannatta

    I’m glad this news was able to get out. A country’s government hiding its financial difficulties is the same as fraud, not only for investors in gov’t bonds and such but the citizens as well.  What I am sorry for is that the guy who said it is probably trying to make a bee-line for the border before the secret police catch him.

  • http://twitter.com/Goldonomic Goldonomic

    China is a high order capital good country and its economic growth has been artificial thriving on low interest rates and fiat money.

  • Anonymous

    This is interesting, but, I wonder if this isn’t mis-information just so that our policy makers will ‘let down our guard’ and underestimate our advirsary even more.  China’s is building tactical weapons to knock out our satelites, they are building submarines, aircraft carriers, fighter jets, and all other ship classes for a blue water (world wide offensive) navy.  They control the Panama Canal (under contract with Panama), We catch Chinese spies almost monthly in US defense contractors.  And they cyber attack even Pentagon computers.  I rest my case.   Stay allert US. 

  • Anonymous

    This is definitely no surprise.  There is no way that China could be thriving when all of the European nations are struggling along with US.  Where would their revenue come from?  The sad part of this article is that this professor – Larry Lang – just put his life on the line.  We may not like what we see on US TV, but sooner or later, we do hear both sides of a situation.  The fact that the government won’t allow reporters to report the truth says it all.

  • http://pulse.yahoo.com/_EHKCTIWGD2YHNS7YFQ27SVJVLQ Edward

    It looks like china did NOT take the advice of its American advisors back in the 80s when they sent officials here to learn capitalism. One of their advisors, who now keeps a blog called Culture Of life News, was told China was starting a 50-year plan to bankrupt the US and gain global dominance. One of her students said to her, “We be bank!” Looks like now they’ll be bankrupt and in hock to the same international bankers everyone else will be in hock to.

  • http://twitter.com/ruhiyaman Ruhi Yaman

    I hope that he is not right – for the sake of American friends posting here. Around USD 900 billion of the US is now owned by Chinese enterprises. Economists estimate around 1 in 3 Americans are now working for the Chinese – whether they are aware of this or not.

  • Anonymous

    Living in China for the last 13 years, it has become very obvious that this article is stating simple facts that are undeniable. Virtually all rail, highway, and infrastructure projects have been halted for nearly 9 months due to lack of funding, gross mismanagement and corruption. Chinese press has noted that auditors are finding losses in project funds to be over 60% of total project funding in virtually all areas.

    Taxes are skyrocketing, foreign businesses are now paying an additional 10% tax, just to move funds out of the country, plus 10% of all profits cannot leave the country at all. Foreigners are now forced to pay social security taxes which are over 20% of wages, and they are not allowed to ever draw social security. Foreign businesses are being targeted for state takeovers using falsified documents and setups to bring criminal charges. This allows the government to expel foreign management and take over the business using local business people tied to the local bureaucrats. Walmart has lost 6 stores in one province because of this scheme.

  • http://pulse.yahoo.com/_LO2WNENU6YQXAHHBVQJZPQW5W4 Jonathan

    Ludwig Von Mises about to be proven correct yet again. A mixed economy system simply cannot function due to its internal contradictions of state directed inefficient management of private wealth. This distorts the hell out of normal, healthy economic signals. Behind that facade of heavy liberalization there is a brutally fascistic regime destroying the country.

    However, I have heard that the real rate of savings amongst the regular chinese population is very high. This combined with a genuine wealth creating entrepreneurial spirit might partially save the situation. It is undeniable that a lot of real wealth has been created by regular people in the last 22 years.

  • Zoey Lu

    now it explains a lot why everything is so expensive!!! To make up all the deficits!

  • Anonymous

    How can the world be in such a financial mess, when prestigious universities throughout the world graduate thousands of economists each year?

    • http://pulse.yahoo.com/_7UITVJTXVSSNF22KQVEIHYK2B4 Joe

      Great simply question from great mind. Why asking questions when you already know the answer? Many people are in huge debt for MBA and student loans.

  • Anonymous

         USA is a democratic republic, or a democracy in current jargon.So is the Republic of China on Taiwan. This enables the Chinese on Taiwan to live in freedom and prosperity and lawful security, as do the descendents of all races in the USA.  This scares the hell out of the Communists in Beijing, which is nothing more than it has always been–a brutal, murderous dictatorship of the Communist Party, pretending to rule in the interest of the ‘proletariat building socialism’–which not even the party members believe anymore.
         Allow the Chinese people on the mainland to have genuine freedom of speech, political parties, and honest elections, as they do on Taiwan, and see how fast they throw out the Communists!  This is why the Communists will launch an invasion of Taiwan as soon as they feel they can get away with it–when they have built a military that can match the USA.
         If they do get away with it–if the USA does nothing–they will go on to attack/invade S. Korea, Vietnam, Burma, Phillipines, and then someday Japan, India and Australia—as well as Mongolia, Siberia and Central Asia.  The younger generation of Chinese colonels and generals and admirals are full of ambitious men who want to make China “Ba”–hegemon–and thus ensure rule of Communist Party Dynasty (and thus themselves) for another century at least.
         That is why world’s future is a race between overthrow of the CCP in Beijing, and World War III.
    I have family in China, where I do business with many party members–take this warning seriously.
        

  • http://twitter.com/GlueBall_ GlueBall

    Curiously, you wouldn’t be able to read this in China, because the press is severely censored…even at 5-star hotels dominated by foreigners: Casual internet sites like Facebook, Twitter, YouTube…etc are all blocked; and when CNN has any negative coverage of China, that portion is blacked out.  …But I do like Chinese fried rice.

  • http://pulse.yahoo.com/_WJUNJ5ZK2HEC4M6BEQDGLZVPSU Cher Kissell
  • http://pulse.yahoo.com/_P6SMDBQ5BXMXKGZN65DK2EXZ6U White

    Look at it this way:  the ten years after hosting an Olympics are fatal
    to one-party states.  Berlin, Moscow and Sarajevo all attest to this.

    Let’s hope Beijing manages a smooth regime change – for once!

  • speakforthosewhocannot

    Wow, the ccp is going down fast and hard. Professor Lang is courageous to speak the truth.  Whenthe ccp is finally dissintegreted the Chinese people will be able to regain what is theirs; traditions can be revived, respect regained, faith in the universal principles, truthfulness, compassion and tolerance can be practiced legally.  The future will be brighter.

  • Yoya

    Chaina shuold start think about becoming a democratic country.