The natives are restless, and as predicted, the CCP will try to keep them pacified with the only thing in China that talks. And we all know what that is.
When Chong Yik Toy Co. went bankrupt, the bosses fled without meeting their payroll and angry workers took to the streets in protest. Less than 72 hours later, the local government came to the rescue.
Armed with bags full of cash totaling half a million dollars, accountants began distributing the money so the 900 former employees would have something to get by on. The Chinese officials who made the emergency payments on Oct. 21 called it an “advance,” part of a “back-pay insurance fund.”
But the reality was obvious to everyone: It was a government bailout.
It’s a scary article. Even though China’s economy is soaring, especially compared to the competition, a drop from 10 percent to 8 or 9 percent is still catastrophic. The plans to spread the wealth to workers in floundering manufacturing businesses are widespread and dramatic. The cash is already being doled out, and the government is doing everything it possibly can – like relaxing anti-pollution regultions – to keep the factories up and running. The big question is, can China make the switch from an export-driven economy to one fueled by domestic spending? Personally, I think they can, but not without a lot of pain in the process. They have the cash on hand to make it happen.
The article is an important reminder, however, that we haven’t even seen the start of this crisis yet. Wall Street soared back recently and there’s a sense that the bailout has put everything back in place, and the worst is over. All I can say is watch the earnings reports in the days and months ahead, and we’ll all see just how deep and cruel this recession is. It’s so easy to forget all about it as we get swept up in the joy of seeing the Republicans dethroned. But Obama is inheriting a headache beyond comprehension, and once the confetti’s swept up and the empty champagne bottles dumped in the trash, we’re all going to have to deal with a new world order, namely, an emasculated America, an eagle with seriously clipped wings. And a China that’s still rising, if not as robustly as in recent years.