China has many scary sobering facts that should make one think twice before supporting or investing in their economy and their government:
1. About 65 million or 5% of the Chinese people live in households with more than $20,000 a year in income.
2. China is a communist country ruled by 1 party with an iron grip. CCP party bosses appoint the national/regional/local politicians and many private company managements since many private companies are ex-SOE (state owned enterprises).
3. Around 165 million or 13% of the people make between $2,000 and $20,000 a year.
4. About 400 million or 31% Chinese have household incomes between $1,000 and $2,000 a year.
5. 5000-year-long traditional Chinese culture was destroyed by the Chinese Communist party
6. About 670 million or 52% have household incomes of less than $1,000 a year.
7. Corruption in China is prevalent, rampant and one of the worst even down to lower ranking employees. For example, a factory canteen worker receives an “envelope” in schemes where he claims he received 10 bags of rice when only 8 bags are delivered.
8. There is almost no “law” since laws are written to support the communist party or corrupt local communist bosses. Judges are appointed by the local communist boss and few if any understand law. Many judges got their job through “guanxi” or connection’s and of course bribes.
9. The Chinese banks are in trouble. E&Y got in heaps of trouble for discussing hidden bad and non-collectable debts. Local communist cadres dictate banks to lend to their pet projects and of course friends who bribe them, not to mention complete lack of transparency.
10. Nobody trusts the communist government’s statistics since they are manipulated. Case in point are growth and inflation numbers.
11. Many of the listed companies numbers are cooked. Auditors can be bribed and extorted, most Chinese companies carry multiple books including one for taxation and another with slush funds and hidden losses.
12. Latest Chinese share and commodity appreciation have lots to do with communists pumping money to the economy by directing the banks to lend. This kind of stimulus cannot go on.
13. Torture widely used in more than 300 Forced Labor camps are located all over the country.
14. As many as 80 million Chinese died after the Communist party gained power since 1949.