I am not an expert in Economics.
But I do understand the basic consequences of both the situations.
Provincial data fudging: Usually the provinces which are generating more income(on average) than the country will try to fudge the data as they don't wanna give those extra bucks to country for wealth distribution.
So the fudged money is off the Chinese books but is still present in, say Shanghai books. This will affect in total Chinese budget allocated every year. This results in less funding of China to improve the status of, say Xinjiang province.
Due to continuous fudging, wealth gets accumulated in Shanghai province. This results in Wealth stagnation and inefficient way of spending and generating money.
Chinese Debt: In my view this is the worst of what China had seen since 1949. If the bubble bursts, then it might surpass the damages made during Great leap forward & Cultural revolution.
Chinese Debt is mostly owned by Chinese banks and most of'em are under Chinese govt control. But the money is deposited by Chinese people. Though all of the debtors may not declare bankruptcy on the same day, but one day govt will be forced to clear it(debt) off show good books make the companies profitable (with huge debts on company's back it won't be profitable or invest in innovation or reduce the cost to stay in competition nor FDI comes in; in 2016 Chinese FDI is $139 billion) when govt does this, it will not have enough money in the banks to give ot back to their population. This will force in printing of more Yuan. Which results in devaluation.
If you remember 2015 devaluation
https://www.google.co.in/amp/s/amp....g/12/china-yuan-slips-again-after-devaluation
And the consequences.
https://www.pri.org/stories/2016-02...urrency-it-s-spent-400-billion-trying-save-it
Maybe another one....
https://www.wsj.com/articles/chines...ne-day-drop-since-2015-devaluation-1518070593
Yuan devaluation, soon followed by Chinese dumping forex to stop the economic collapse. Due to huge dumping of China forex(mostly $$$) American dollar value decreases with sending shock waves through the rest of the world while acting as catalyst for American economic collapse.
If everyone thought of 2008 as bad, then Imagine this new recession exponentially larger. No country would survive this catastrophic economic collapse at same time.
Excellent, now tell that to your bank when they come knocking at your door for your next EMI. Since you and your bank both are Chinese you can play pocket billiards together and live happily ever after.
Commercial banks regardless of their ownership are profit seeking organizations. Is it really that hard for you to understand? How old are you dude?
Do you?
Once again you dragged India into the discussion. Boy, you love creating strawman, don't ya.
But since you have, NPA's of Indian banks are giving nightmares to the government and as a proportion to revenue collection, it is a far smaller problem than what China is facing so a recapitalization program has been initiated.
US had to the same when 2008 recession hit the floor. A massive $700 billion stimulus package was initiated to prevent banks from going under.
Talking to you feels like talking to a wall that is suffering from Down syndrome.
If you still want to drag India into the conversation, open up a new thread.
1. as for 'data-fudging'
in china, the promotion of governors is related to the growth of local economy. the governors would be sacked if local economy grows too slow.
for better future and promotion, some local governors like fudging data of GDP.
however,to order hand in less tax,those enterprises(espeically small enterprises) tend to underreports their revenues.
thus, the GDP released by local government is the final of such a game-playing among boasting-tending governors and tax-evading enterprises.
people here usually think those provinces (like Liaoning in northeast China) with state-owned economy mainbody of its economy have their GDP cooked while those provicces with active non-state-owned eocnomy have their GDP underrated.
2. as for tax reform and GDP-cooking
before last year, boasting cooked GDP is cheap to Chinese local governors.because Chinese center government does not collect tax on the cooked section of GDP.
but last year, the tax system reformed and Beijing start collecting tax on the cooked sections.....
thus, boasting cooked GDP becomes expensive,,no local governments would hand in tax to Beijing for 'fake GDP'
that is why soo many local governors blah
'that is all the fault of last governors.....I am innocent brave guy to expose data-cooking scandal....'
3. as for debt of Chinese government
most of debt owned by chinese government is used to invest infrastructures like highways,expressways, seaports,areports,subways,industry park....etc.
during the last decade, the value of infrastructures has kept rocketing.
as long as urbanization lasts in China, the value of those infrasturctures will keep growing.
thus, those debt invested on infrastructure is 'positive debt' ,with valuabe infrastrures as safe mortages.
4. as for 'passive debt'
the one people should pay attention is those 'passive debt',used to pay pension,salary of government employees,medical-care and expense of war
those 'passive debt' can not bring profit and always drag down the economy.
5. Chinese deals with 'government debt' much better than USA ,EU and most other countries .
during the past decade, Chinese government borrowed trillions of dollars and invested them on infrastructures,leaving global best brandnew highspeed rails,expressways,industry parks,seaports and airports,subways all over china.
USA spent borrowed trillions of dollar bombing iraq and
Afghanistan,leaving nothing but millions of hurts and death.
EU spent borrowed trillions of dollar on social welfare ,hospital refugees and saving the ass of PIGs,now leaving a chaos where more and more refugees rush into EU and Greece are calling for more ass-saving aid.
Japan is spending borrrowed trillions of dollar paying the pension for its aging popualtion.
as for india....thanks for the god, India even can not borrow trillions of dollars at all.
