China's epic hangover begins. China's credit bubble has finally popped. The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC's dream that is at last coming down to earth with a thud. Chinese stocks are flashing warning signs. The Shanghai index has fallen 30pc since May. It is off 60pc from its peak in 2008, as much in real terms as Wall Street from 1929 to 1933. – Telegraph/Ambrose Evans-Pritchard
Dominant Social Theme: Don't look now but China is fading.
Free-market Analysis: Ambrose Evans-Pritchard, one of the very best mainstream financial journos, is back with another update on the Chinese economic collapse, and we appreciate his updates. We've been harping on this theme for at least two years. Just Google "Daily Bell" and "China's Potemkin Village."
For a long time we were a lonely voice. Throughout the 2000s, China was the hot story in the mainstream press, and for many it still is. One of Fidelity's managers who has lost some 30 percent of his clients' money in China just announced he believed the Red Dragon had turned the corner and that his fund would benefit considerably. Good luck with that.
For us, the Chinese miracle, as we eventually came to understand it, was nothing but a concoction of central bank monetary stimulation and the relaxation of state controls on market-driven family businesses.
The larger industrial and banking entities remained firmly under the control of top-level ChiComs – though in a more hidden manner. Westerners were often fooled into thinking there was competition between these vast industrial entities when there really was not.