A recent article in Hong Kong’s Frontline Magazine listed a series of crises that the Chinese regime will inevitably have to deal with during 2014, making this year an extremely dangerous one for the Communist Party. Meanwhile, U.K. analysts also believe that the 2014 China economy will go through great changes.
The Chinese Communist Party (CCP) will face a series of deep-rooted crises, which have not been seen for years:
1. The trend of the yuan appreciating abroad but depreciating in the mainland cannot be sustained any longer, which will trigger super-high inflation and stagflation.
2. The housing bubble will burst, and local governments carrying heavy debts will be on the verge of bankruptcy.
3. The credit bubble will be spurred to burst by financing products, shadow banking, and high-risk investments.
4. Over-productive sector collapses on a large scale will increase the bad debts in banks.
5. Large-scale divestments and bankruptcies of corporations will take place. The postponed retirement policy caused by a social security pension deficiency of 18.3 trillion yuan will lead to a significant rise in the unemployment rate.