Chinese academics hardly ever make any negative references when they speak publicly about the state of the Chinese economy.
In this context, the recent public lecture of Professor Larry Lang, who reportedly said that the countrys GDP is going in reverse, is remarkable.
-----------------------
In the unusual, closed-door lecture, Lang gave a frank analysis of the Chinese economy and the censorship that is placed on intellectuals and public figures.
What Im about to say is all true. But under this system, we are not allowed to speak the truth, he said.
---------------------------------------
He said that the regime doesnt listen to experts, and that Chinese Communist Party officials are insufferably arrogant. If you dont agree with him, he thinks you are against him, he said.
------------------------------------
1.The regimes debt sits at about 36 trillion yuan (4.3tr euros). This calculation is arrived at by adding up Chinese local government debt (between 16 and 19.5tr yuan), and the debt owed by state-owned enterprises (another 16tr, he said). But with interest of two trillion per year, he thinks things will unravel quickly.
2.The regimes officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang.
3.There is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the purchasing managers index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that Chinas economy is in recession.
4.The regimes officially published GDP of 9 percent is also fabricated. According to Langs data, Chinas GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in infrastructure construction, including real estate development, railways, and highways each year (accounting for up to 70 percent of GDP in 2010).
5.Taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 51.6 percent, Lang said.
