Understanding China, One Blog at a Time

An American in China

Shitty Chinese Army, Shitty Chinese Banks, Shitty Shitty China-china News

Posted by w_thames_the_d on July 28, 2012

Here is a killer post from Brewskie about The haps in China. My only comment is
that the chinese chicom duds ought to be thanking their leader satan that Brew lives in the USA. Imagine how much dirt the BrewMan would dig up if he lived here…..

From the Balla

LOL! So the only thing the PLA is good at is well-orchestrated military parades?

If the Beatles sang today, Jon would sing “China is a cha-cha-cha-changing, but she is a bre-bre-bre-breakin’ .” All the news that’s fit to print…

The harbinger canary in the economic coal mine? Tax revenues – they’re droppin’ in China.


Beijing mayor Guo Jinlong and vice-mayor Ji Lin. Guo’s fall on their swords in the wake of the flood; opportunity opens the flood gate for other ambitious/connected CCP cadres lookin’ to PR up Beijing’s deplorable failure of a sewer system. Come on: it took a Category 5 hurricane, the deadliest one to hit America since 1928 to devastate New Orleans; Chicago’s old, creaky antiquated sewage system was toppled by marauding rain during the Flood of ’93; – you seriously think your ready for the world stage if your capital city’s infrastructure under performs?


It’s been my observation when Chinese itch for mob-burning festivities, the CCP often blames foreign devils for their dilemma (get juggernauts like Apple to clean up their pollution, while native SOEs seamlessly continue to produce cancer victims as byproducts of mass-produced pollution. Do mobs burn factories of Changfeng, Dadi, Beijing Automobile Works, Xinkai, SAIC Motor, Jiangling, Sichuan Tengzhong for continuously, and ceaselessly, churning out fabricated cartons of crud that spits out more problems in their 1st year, than an American, German or Japanese auto 10 years old? Hell no. But German bad boy – vain, Vicodin-Viagra vanquishing VW (which I know are not the greatest autos compared to Japanese variants, often rank low in Consumer Reports’s long-term reliability surveys, but are still countless times better than Third World Chinese junk) – get read the riot act over “glitchy gear boxes.” WTF? In auto accidents, Chinese drivers frequently negotiate settlements, often not covering the full extent of damages on the spot minus police & insurance participation; why seek such full-force vendetta against well established automakers, with better products, over horrendous native boyz with horrendous not-so-funny cars?


China’s equivalent to AIG – “credit guarantee companies”? Read what’s afflicting Wenzhou this:

“Credit guarantee companies, as the name suggests, provide guarantees for borrowers. Private borrowers may not be able to borrow money from banks direct because they do not have government backings, or they do not have enough assets to demonstrate to the banks that they are credit-worthy. Thus credit guarantee companies come in at this point where they provide guarantee to banks after they have verified that the borrowers are good. In return, these companies collect fees from borrowers. If the borrowers default on its loans, the credit guarantee companies, of course, have to cover the losses for banks.

But it turns out that companies often ended up guaranteeing loans for each other.

A recent story from Caixin suggests that the practice of guaranteeing loans for each other is common in Zhejiang (and by the way, Wenzhou is a city in Zhejiang, where a lot of the shadow banking activities took place), where company A acted as a guarantor of company B, and some subsidiary of company B ended up acting as a guarantor for company A. If either of the company went bust, banks would be worried about the loans they made to other companies that were guaranteed by the company that has gone bust, so banks ended up calling loans for every company in the chain, and these companies might have guaranteed loans for more companies, so more companies are in trouble.

This is exactly what’s happened. Tianyu Construction Co. went bust early this year, and because of the complex web of connections where companies guaranteed loans for each other, a large number of companies have been affected by the bust of Tianyu Construction Co. According to Caixin’s report on 26 June, 62 companies are affected to a varying degree because of the bankruptcy of Tianyu.

Sources say 62 companies, from furniture makers to import-export traders, have been affected to varying extents by the collapse late last year of Hangzhou-based property developer Tianyu Construction Co. Ltd.

The companies were financially linked to Tianyu through a province-wide, reciprocal loan-guarantee network. Tianyu’s sudden failure raised the spectre of a domino effect of defaults taking down every network participant and devastating their lenders.”

Flat/lower power consumption, piling inventories of black mountains=crying-in-their-beer coal barons: prices have slumped 23% in the last two months.


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