China’s economic crisis is “one of Chinese investors’ faith” in their country’s government system, according to an expert who warns China is threatened by a “lack of transparency”.
Brian Kennedy, chairman of the Commission on China’s current crisis, said the economic downturn across China was due to a lack of accounting standards, calling the country a “black box” with no financial rules to follow. He said that
President Kennedy told GB News that China’s “lack of transparency” was a serious threat to his country.
“The US and the UK have all kinds of regulations that companies have to follow, including disclosing all kinds of accounting requirements so that the public can actually know what’s going on financially within a listed company. “There is a law,” he said.
Watch now: China expert explains how China’s ‘lack of transparency’ is a serious threat
“In communist China, it’s a black box. There are no accounting standards that everyone has to follow.
“So whenever there’s some sort of recession or people are wondering whether it’s safe to invest their money in communist China, it’s important to know that their money isn’t just being stolen. There’s nothing to prove.
“And the collapse of the real estate market is partly based on the idea that people don’t even know whether the money they invested in real estate companies actually exists, whether the real estate even exists.
This comes as investors argue that China’s share of the global economy is declining and that its transformation could lead to a “global reorder.”
Latest developments:
Expert Ruchir Sharma said the country’s share of global gross domestic product (GDP) is expected to shrink by 1.4% in two years, marking the end of decades of growth for the country.
In nominal dollar terms, which Sharma argues is the most accurate measure of an economy’s relative strength, China’s share began to decline in 2022 following a series of strict coronavirus measures.
President Kennedy said the economic downturn was actually due to a “lack of capacity.”
He added: “So the current crisis in communist China is one of Chinese investors’ confidence in their government system.
Expert Ruchill Sharma said the country’s share of global GDP is expected to shrink by 1.4% in two years, marking the end of decades of growth for the country.
Reuters
“And this economic downturn is actually due to the inability of Chinese consumers to be part of the real economic system.
“And I think the lack of transparency is a real threat to communist China.
“They talk about knowing a market-based economy, a market based on characteristics of social socialism.
“But the reality is, as I say, this is a black box, and that black box is causing major economic problems right now.”