China: “If top leaders cannot deliver what they promised, the public will not remain silent.”

China’s Looming Crisis: 

Daunting Troubles Mount

by Joel Brinkley

China’s in deep, deep trouble, and its new leaders know it. The growth of the nation’s GDP has continued to slow every quarter since late 2010—though it did tick up slightly in the state’s latest quarterly report, published in January. But that’s just one of many problems. In the simple words of D&B Country RiskLine Reports’ year-end assessment of China, “Trend: deteriorating.”

Xi Jinping, the nation’s new Communist Party leader, assumes the presidency this March, and the country is hoping, albeit with considerable trepidation, that he will bring positive change. But China’s troubles—economic, political, social—are daunting. And as the full government transition approaches, these problems seem to be converging. One significant symptom: Money is flowing out of the state at an alarming rate, a sign that wealthy Chinese have lost faith in the country.

Of course, China does not make public any figures of this capital flight. But reliable estimates from several journalists and economists published late last year estimate that between $225 billion and $300 billion has left the country in the past year, three to four percent of China’s economic output for that period. And this has happened even though moving significant amounts out of the country is strictly illegal. The outflow is growing larger every year, just as the GDP continues to fall—not a coincidence.
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