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"Recently we've seen some interesting cases of Chinese officials getting up at seminars and press conferences and, for no apparent reason, revealing that things aren't so rosy in the Middle Kingdom."
"In March, Premier Zhu Rongji said that without the fiscal stimulus spending of the last few years, China's economy would have 'collapsed.' Then Finance Minister Xiang Huaicheng last month suggested that if other engines of growth aren't found, China is approaching a time when that collapse can no longer be forestalled. He called the country's fiscal situation 'grim' and said that the government could not maintain its current level of spending for much longer."
"Just ahead of the May 1 Labor Day, China's Labor Minister Wang Dongjin warned that the employment situation is also 'grim' and social stability is in jeopardy. Even if the economy continues to grow at an annual rate of 7%, he explained, unemployment is set to soar, since on net only eight million new jobs will be created each year while the labor forces grows by as many as 13 million people. In March, the central bank Governor Dai Xianglong admitted that the bad loans of the four big state banks, which dominate the Chinese banking system, are actually much higher than official estimates and could represent as much as 30% of their total lending. If they continue to rise, the national debt could be pushed to a dangerous level."
"What does this outburst of apparent candor mean? There are several reasonable guesses one could make. The most obvious is that China's reform process is in danger of stalling, and those at the top are trying to generate a sense of urgency in order to overcome bureaucratic inertia. Another is that at a time of leadership transition, factions or individual ministers are airing some of the dirty laundry in order to gain some advantage." [via BrinkLindsey.com]
1:09:27 PM Google It! 
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