China’s Pension, Foreign Exchange Reserve Becomes ATM.
Recently, economic researchers in Mainland China
published articles saying
two officials who seem not to have anything to do with
each other – Huang Qifan and Dai Xianglong,
seem to be giving a two-man show.
Let’s take a look at what is going on.
On September 15th, China Social Security Fund Council
chairman Dai Xianglong expressed in Shanghai that
there really is a gap in retirement pension,
and the way to solve it is not to prepare money
passively but to adjust the system.
According to Dai, improving pension system may involve
extending retirement age and extending the number of years one pays for pension.
Peking University School of Economics professor
Xia Yeliang expresses,
after the CCP obtained political power in 1949,
it promised to workers that as long as they contribute to social democracy,
all retirement expenses will be the
responsibility of the nation.
Xia Yeliang: “People in that generation all had a
very difficult time, they did a lot for development,
but at the end, when they are retired,
there is no fund waiting for them,
so they can only try to gather money here and there,
the money they get is very little, so the retirement fund they received is very meager.”
The CCP only started to officially consider the
establishment of the “pension account”.
The nation, individuals and enterprises all take out
some money as retirement pension.
Xia Yeliang points out, China’s social security fund gap
is a problem that has been continuing for years.
Xia Yeliang: “As early as ten years ago, I was with
economist Wu Jinglian,
and I heard him say he had talked to Zhu Rongji about
this problem when Zhu was in office.
Said at that time, social security fund gap was only
more than seven billion, but now this gap is bigger.
It is not a few billion, but at least a few hundred billion.
So, if the nation cannot fill this gap, then who can fill
such a large difference, such a large gap.”
On the other hand, on September 19th, Chongqing City
held a coordination meeting with 68 financial institutions and financial regulators.
At the meeting, Chongqing City Mayor Huang Qifan asked
Chongqing’s three largest banks to take the lead,
that the intermediate operating expense must reach at least
25% of total earnings in 2015, and at least 40% by 2020.
Xia Yeliang;” This is completely giving orders in vain.
Government intervening in economics too much will create
that weird loop, that sort of trap during the era of planned economy.
China’s economy is now in a state of decline,
so if they continue to give orders blindly,
then the natural laws of economy must take affect and
punish those presumptuous government officials.”
Currently, many economic experts and scholars look badly
upon China’s economic trend.
At the meeting, Huang Qifan tried to “pump up”
local financial institutions and said compared to Europe,
United States, Japan and other capitalist countries,
China has at least nine trillion more U.S. dollars of regulatory capacity.
New Tang Dynasty special economic commentator
Jason Ma expresses,
foreign exchange reserves has been released and
cannot be taken back to China to use.
Jason Ma: “It cannot take the three trillion worth of
foreign exchange reserves to pay back the government debt, economically it is not allowed.
It has been done before, in reality it was very controversial,
it is printing cash with no backup, diluting the value of RMB.
In other words, it created inflation of RMB.”
Jason points out, 60% of debt in western countries
such as the United States is created by welfare and various expenses paid to the people,
but the welfare expense for the Chinese regime is very low,
40% of debt are created due to CCP officials’ personal squandering of public funds.
Jason: “Now they shamelessly say according to the standard,
I can still owe three trillion.
In other words, the amount of corruption, personal
squandering of public funds, government’s waste,
and stability maintenance overdraft can be a little bit more.
The third is, the state-owned enterprises are sold
to private enterprises now.
Its own institutions are overstaffed, inefficient,
have lost monopoly position,
these enterprises are a liability, it cannot withstand the
impact of free market competition.”
Mainland economic researcher Mayu believes,
it is not clear who busted whose bubble, but coincidentally it leaked heavenly secrets.
For one, it is ok to have money, but it is not for the citizens,
and it is better if you don’t take back the pension fund you’ve paid.
For two, there is really no money, those three
“bullet proof jackets” (foreign exchange reserves) are all fake, is glued together with paper!