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Why CCP China is likely to collapse?

Updated: Jan 14



Few people realise that the successful rebuilding of countries like Germany and Japan, after World War II, and the subsequent spectacular growth of [ASEAN countries and now China have all come about mainly due to American support and patronage.


All these economies have achieved their growth and prosperity by exporting primarily to the American market with access made available to them on favourable terms. In addition, they have had access to the best technology, training, equipment etc. enabling them to develop their indigenous capabilities.


Most importantly they were all financed primarily by American finance.

Thanks to America, China, over the past 3 decades has received over US$ 55 trillion of funds. These include,

  • US$ 40 trillion of mainly external debt.

  • Capital invested in China via American and global capital markets is US$ 14 Trillion.

  • Foreign Direct Investment (FDI) over US$ 1 trillion.

  • China is a country on steroids, in fact, massive amounts of financial steroids.

  • With that kind of walking around money, The CCP leadership has,

  • Constructed world-class infrastructure in many parts, of China which is essential to enable an economy to operate efficiently and effectively.

  • China has used much of this wealth to subsidise all aspects of its manufacturing to drive all relevant global competitors out of business, forever.

  • Propped up gigantic white elephants, China's State Owned Enterprises (SOEs) that provide the jobs, and lifestyle of China's 90 million Communist Party of China (CCP) members.

Any nation on a diet of very heavy steroids for long periods is operating a giant Ponzi scheme, and therefore at its core a weak economy. This is why we can say the Chinese economic miracle is fundamentally a beautiful bubble, one which has been gradually deflating and is soon about to burst.


China has been riding high on steroids for too long and has created the world's largest but unsustainable economy.


Propaganda and glitzy, impressive infrastructure, driven excessively by unsustainable debt, (300% of its GDP) gives the world the illusion that China is a superpower. America too has huge debt (120% of GDP) and India's is 84% of GDP.


The difference is American Dollar is a 'fiat currency', while the Chinese Yuan is not. A Fiat currency permits America (which the world grudgingly trusts) to print money at will with limited adverse consequences, something the Chinese Yuan cannot do.


A financially unsound economy, managed by a xenophobic highly centralised and controlled leadership, even with great infrastructure pursuing a Wolf-Warrior strategy by themselves, does not an empire nor a superpower, make.

Borrowed capital must be repaid with interest, even for China.


Since China has used its capital rather wastefully. With so many non-performing assets, China services its debt, by borrowing even more money. China tackled the 2008 global financial meltdown with a huge financial stimulus (more debt for more useless and economically non-performing projects including its $1 trillion much touted BRI projects. To get an idea, China has poured more concrete in 3 years within China than America had done in an entire century.)


The CCP has been successfully consuming increasingly massive doses of steroids for too long a period. Even steroids have limited effect after their use has been abused.

China is running out of economic stimuli options, even though it keeps up its massive borrowings and is sinking deeper into debt.


Ask any doctor and you will learn that an entity that consumes excessive steroids will perish painfully. Before that, it will experience, extreme anxiety resulting in psychotic, aggressive, hostile and violent behaviour. The ability to function and extreme anxiety set in before excessive steroid abuse leads to multiple organ failures, shock, coma and death.


The CCP is a repressive controlling regime that has reduced a great amount of poverty in China but also killed 70 million of its people in 70 years. Trampling over not only the rights and liberty of Chinese people and those of the people of Tibet and Xinjiang the CCP at its core is hollow and fearful.



The Chinese economy is still very, very big but it is now in terminal decline. The CCP in its craving to retain power, at all costs, has re-centralised the economy driving itself to its doom. It is doing away with more than 30 years of private sector development, the sector that led China's economic and technological growth.


The price to be paid for these actions, its one-child policy and its many other actions, humanitarian, economic, political, social and military are now visiting China.


China's brazen approach and seemingly unconcerned management to control the spread of the Coronavirus pandemic beyond its borders has infuriated the world who are now united against China, triggering a domino effect. We are witnessing 'Chexit', which is the name of the trend of foreign investors and manufacturing companies seeking alternatives to exit China.

No party or country can remain a political, economic or social island. The laws of Karma, state that there will always be related consequences for actions taken.


We are already witnessing the beginning of several organ failures of the CCP.

For China, things are going to get a lot worse before they get better.


The CCP has realised, 'They, who choose to ride the dragon can never dismount'


 

This is the first part in a series that provides the underpinnings for the conclusion, of why there exists a high probability that CCP-ruled China is likely to collapse.


 

Interesting links:



 

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