The John Batchelor Show

VIDEO: 'Dead Panda Bounce'

April 14, 2016

Wednesday   13 April 2016 / Hour 1, Block A: Fraser Howie, Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise, in re:  Anbang offers to buy Starwood Hotels, then walks away — in mysterious circumstances. Casts a shadow on every Chinese investor. Need to double-double check and ask too many questions. The dead-cat bounce: yesterday’s numbers weren’t as ghastly as expected, but the govt refuses to tackle the underlying issues. Anne Yang; “A dead panda bounce.”   If you assume that GDP numbers are right, then Chinese growth wd be 6.8; however, we're not even clear about the debt build-up figure.  These days people borrow money for a deposit on a house.  Try: debt growing twice as fast as GDP.   Back to Anbang: there was a strange deal on the Waldorf and a 100-year management contract.   As it was offering to buy Starwood, outsiders wondered where hte money was coming rom – assumed that it was govt money and so govt backing, but the deal fell through. A warning to anyone chasing after Chinese cash.  “Increased fibbery.” No one believes the Chinese figures – even Chinese negotiators laugh at them. The vastly increased borrowing: unsustainable.
China incurring debt faster than it’s growing ; and:   http://www.telegraph.co.uk/business/2016/04/06/chinas-debt-explosion-threatens-financial-stability-fitch-warns/