Regulating mice catchers
Removing the head of the stock market regulator because he has not stopped shares from falling, is just what you would expect from a country that wants to look like a free market economy but isn’t.
China is rapidly approaching an economic crisis that we should all worry about; a massively over inflated property market which is permanently on the verge of collapse, falling prices, shares collapsing in value, and a government desperately trying to keep the balls in the air.
Banning price falls, hiding unemployment, propping up the currency, house prices and share values. It can’t be done for ever, not when hundreds of millions of small investors see their life savings vanishing. Not as the Communist party lies about the economy and manipulates the markets.
China decided some 40 years ago that “it doesn’t matter what colour the cat is so long as it catches mice”. That is, if capitalism is better for growth than communism, then go for capitalism.
But it has gone for capitalism with total communist party control and the communist party won’t accept failure or it seems losses either.
Well I am afraid to say that failure is a integral part of capitalism. Weak, inefficient, loss making, politically controlled firms, in rigged markets will fail eventually and with a far greater mess than if real capitalism was allowed to work its course.
It doesn’t matter what colour the cat is but it won’t catch mice because you issue a directive or order it to, or ban reporting of mice shortages, or keep the cat in a cage, or fire the cat regulator.
The West has ridden the Chinese economy for all it is worth, the Chinese authorities have effectively been subsidising production by foreign firms in China, subsidising property empires, propping up markets and rigging exchange rates, creating employment.
Sacking the regulators is not going to help.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media