“In the next five years – Lu Ji’s thought – without further tax cuts, Chinese tax revenues will be very low.
As for the organism, the US QE will raise the price of stocks and other financial assets beyond any reasonable impetus, while – as the Monetary Fund explained – the total sovereign debt of the advanced economies has already risen to 123.9 by 2020, well beyond the record recorded at the end of World War II. . “Last year only 15% of Chinese government spending was used to pay interest on debt, which was 13% in 2019. In addition – he added – it is necessary to think about the population-aging population bomb – by the end of 2019 176 million Chinese will be over 65 years of age, out of the population Equals 12.6%, which should include 12.6 people between the ages of 65 and 60, and 177.6 million people.We are experiencing a change not seen in a century ».
Guo Shopping spoke of the “bubble risk” in international markets, where financial markets in Europe and the United States are not in sync with the real economy, but are driven by monetary and monetary policies that risk contagion (“spillover”). Chinese financial system “.
The CBIRC sought to mitigate internal risks, with bank assets growing at a rate of 8.3% per annum from 2017 to 2020, while insurance assets traveled at a rate of 11.4 per cent. Interest rate growth was halved from 2009 to 2016, and non-performing loans of 8,800 billion yuan (more than $ 1 trillion) were under control. The shadow bank has lost 20 trillion yuan to law enforcement, but the real estate market worries Guo with its perverse dynamics, and a few months ago defined him as China’s true “gray rhinoceros”.
“The problem is that the real estate bubble in China is huge – he said – we continue to buy homes for speculative reasons, which could be detrimental to the economy.