我译：中国的经济-泡沫爆裂之唳

中国的经济-泡沫爆裂之唳
 
股市低迷，利润前景暗淡，而通胀预示着更多的不稳定

Vincent Kolo，香港

这个奥运年，对中国政权来说什么都不对头。根据目前的状况，中国的经济仍然以两位数的比率扩大着，美国巨大的信用泡沫的破裂带来的全球资本主义危机越来越靠近中国。尤其是，美元的崩溃，现在的"次级"的货币，特别是由于美国中央银行（联邦储备委员会）在6个月内恐慌性削减其主要贷款利率3个百分点至2.25 ％ ，开始造成中国的经济的真正的苦痛。温家宝总理最近说的他对美元贬值"深感忧虑" 并非一无是处。
 
人民币对美国货币的升值已形成中国南方的作为出口火车头的珠江三角洲（PRD）某些衰退的征象， 该地区占了中国的国内生产总值的八分之一。根据一些估计数字，过去一年中，这个地区有1000家制鞋工厂倒闭，他们大多迁到便宜，管制较少的内陆省份，还有越南和其他低工资经济体。作为珠三角的一个工业城市的东莞的当地政府近日宣布了一项新的基金来帮助外国公司进行技术上的升级，把面临人民币的上升趋势冲击的劳动力密集行业转移出去，如鞋类和纺织品。
  
美元贬值以多种方式影响中国，首先是显著的出口增长放缓（尚未收缩）。二月份，中国富有传奇色彩的贸易盈余下降64 ％ 。基于今年头2月，与整个2007年14 ％的增长相比，对美国市场出口停留在同一水平。由于投机者争相通过购进上升货币如人民币来使资本保值，美元的下跌带来了一场新的"热钱"进入中国的洪水。按照目前的趋势，在近两年来攀爬15个百分点后，今年中国货币对美元将升值另外的7 ％ 。炒家甚至对更大升值进行赌博，北京政权为了控制通货膨胀，有可能采取一次性升值的措施，以年率8.7 ％运行。我们不能排除此一举动的可能性，尽管它取决于政权认为最大的危险在哪里：粮食暴动和通货膨胀驱动的抗议，还是由货币升值带来的出口部门工厂的倒闭和可能的罢工之潮。

害怕通货膨胀
  
世界上没有多少政权比中国的名不副实的'共产党'政权更怕通胀。通货膨胀是1949年还有1989年带来革命性剧变的一个重要因素。通货膨胀的压力，特别是急剧的食品价格上涨，与去年同期比，食品价格上涨了23 ％ ，无疑也是上个月藏族地区暴动背后的一个重要因素，再加上压抑了的不满，宗教和民族的迫害，共同作用产生了20年来也许50年来西藏最严重的骚乱。北京政权担心学生中可能爆发骚乱，已下令中国各地的大学增加对它们的食堂的补贴，这令人浮想起1949年和1989年的另一种现象。

像印度尼西亚，埃及，摩洛哥，阿根廷，墨西哥及其他几个国家的政府一样，中国政权已重新对基本食品，如食用油和大米实行价格管制，但由于国家不再控制食物分销业，这些都不是特别有效。"中国社科院的易选龙（音译）在中国日报（ 2008年3月4日）评论说："对商品价格的行政控制对市场的发展的当前阶段影响不大，企业与市场有各种手段来打消国家的价格管制的影响。上个月作为一个顶级制度经济学家的高辉清说："中国在全球经济一体化中是世界经济的四轮马车而不是驾车手。由于大陆物价上涨的百分之七十可以归因于国际因素，国家自己没有能力处理这个问题。" [南华早报， 2008年3月19日] 。
  
中国现在是主要的农产品如大豆类，玉米和肉的进口国，而国内农产品价格越来越多地反映出世界市场价格，已达到历史高峰，并定留在那里。中国日报（2008年 3月22日-23日）引述"国际粮食政策研究所一份新的报告说世界农业正处于危机之中"。除其他事项外，它指向了极端的天气现象，土地供应缩减，消费的增加（如在中国）和生物燃料的生产。这份报告还警告涌动的食品价格上涨是"一个重大的政治关切" 。在短期内，物价上涨提升一些农民的收入，而社会的一大部分，无论在城市和农村，特别是最贫穷的阶层，都大大地不如一年前。在南部和中部地区由于严重的冬季，再加上中国北方一个为期两年的干旱，这些就破坏了国家的可耕地的六分之一，这将进一步加大今年农产品物价上升的压力。这就是为什么政府已把控制通货膨胀放在其'头号'优先的位置。但正如中国工人和农民都知道的，该政权的意图和它的实际效果之间有着很大的差距！

美国联邦储备委员会大幅削减利率的行动已严重限制了中国政权和中央银行的活动空间。尽管在2005年松动了其钉住美元的汇率政策，人民币仍和美钞紧密地联系在一起。不过，因为"次贷"危机的加深，两个经济体的利率差急剧扩大。为经济过热刹车，去年加息6次后，中国人民银行（PBoC）的基本贷款利率目前为百分之七点五，与此相比，美国的为2.25 ％。这已导致新一波的投机性资金流入中国，这给决策者带来了一些问题。在今年首两个月，中国的外国直接投资（ FDI ）比去年同期激增75 ％以上，达到180亿美元。如果这种趋势全年持续下去，这将标志着一个新的外国直接投资纪录。

这种资本必须由中央银行通过用人民币更换美元来'消化'，这导致了多余的进一步扩大的货币供应量，这反过来又刺激通胀。大部分的外国“投资”是纯粹的投机，投机到房地产交易，这有助于推高地价，从而形成了在任何时候都可能破裂的滔天的地产泡沫，而在沿海的一些地区可能已经爆裂。华尔街日报报导说在一些顶级城市楼价下降了30 ％之多，并补充说： "中国的地产商是处于包围之中。在许多国家的主要市场，资产价格均呈现疲软迹象，以及资本市场完全被这些-以及其他-产品所包围"。 [华尔街日报， 2008年3月26日] 。

房地产泡沫...仍在膨胀
  
激增的房价已经和其他经济方面的问题组合起来。许多普通的中国人由于价格而止步于房地产市场外。在70个最大的城市，与去年同期比较，1月份整体房价飙升11.3 ％ ，为3年来增幅最大。超级富豪大地产商已积累梦幻般的个人财富-他们经常处在中国的超级富豪榜的顶部 -这一事实激起了政治性的不满情绪。去年的福布斯名单上有一半以上的富豪，中国的40个最富有的个人，涉及地产界。  

'共产党'经营的中国日报（ 8-9 2008年3月）的一篇社论宣告了"今年是中国1998年取消其数十年之久的福利分房制度的十周年 " 。正如本文所指出： "虽然迅速满足了少数富人的需要，蓬勃发展的房地产市场已经在很大程度上忽视了低收入者或许多中等收入的家庭的可以负担的起的房子需要，更不用提需要栖身之所的城市贫民的需要了。"

螺旋式上升的住屋费用是为什么消费者支出甚至继续处在远远低于其他'发展中'国家的低迷的水平一个重要原因。去年，消费开支占到中国国内生产总值的40 ％左右，与之相比，美国达到70 ％以上，即使在印度也达到59 ％ 。许多资本主义经济学家以及最重要的是由中国政权提出的中国国内消费可以平衡美国消费在世界市场上所造成的下滑，这一想法是荒谬的。中国工资过低，其基本必需品如房屋和上学的费用实在太高。中国可靠的薪金统计资料是几乎不可能找到的。没有止境的声称城市里工人在最近几年里至少有了'很大'的工资增幅。然而，这是一个谬论，最多只适用于城市中在私营和特别是高技术行业里的较小的某些工人阶层。这一年只有30 ％的中国工人要缴纳个人所得税，个人所得税起征点是月收入1600元（ 160欧元）。那么，中国7亿5千万的强壮劳动力中有5亿2千5百万中国人的收入少于每月1600元人民币-一个非常可信的数字。没有巨大的职工工资增长，资本家当然会全力抵制工资增长，这些工人是被排斥在刺激消费以补偿美国经济影响带来的收缩的宏伟设计之外。
  
新屋主花他们每月的收入的一半供楼并不鲜见。央视报道（ 2008年3月15日）特写了一对北京的夫妇为他们的两个卧室的公寓每月要支付逾4000元人民币给银行的事例，占他们每月的收入的60 ％。除了房屋花费抢占了一个城镇居民家庭的收入越来越大的份额外，教育和医疗费用也极端的高，由1990年占城镇居民的总开支的百分之十上升到了2006年的30 ％左右 [中国日报， 2008年3月14日] 。
  
这也解释了为什么在与中国有关方面，坚实的新自由主义机构如经合组织和经济学家这样的期刊也已经成为福利国痴迷者，要求其统治者重建基本公共服务以作为一种手段来哄人们减少储蓄，多花点他们还很低水平的工资在消费品上。尤其对于大多数农村，卫生保健基础设施是一团糟。四分之三的中国的总医疗资源集中在城市地区，只覆盖了35 ％的人口。据中国日报（ 2008年3月14日） ，占世界百分之二十二的人口的中国只有2 ％的世界医疗资源。在此基础上，7亿5千万的农村人口，约占世界人口的八分之一，只能得到0.5 ％ 的世界的医疗资源。
  
股市泡沫...破裂！
  
在世界上，2008年，中国股市一直是表现得最差之一，只有越南遭受了更大的损失。在上海交易所的16年的历史上，2008年第一季度是最坏的，主要的SCI指数失去了34 ％ 的价值。用金融市场行话来说，下降百分之十是一个'调整' ，而下降20 ％ 是一个'熊市' 。当然，今天世界上的股市真的是一个大中型赌场，只是间接地反映实体经济的进程。不过，对中国股票市场的恐慌是即将出现危机的一个征兆，对于整体经济来说也是一个严重问题的来源。
 
自去年10月的高峰以来，超过12万亿元人民币的股票价值已被摧毁，相当于半年中国的国内生产总值。在四年前，股票市场甚至还不是中国经济的一个重要的因素，随着2005年金融部门的改革，这种情况改变了，其中最重要方面意味着不只是少数公司的股份，该国的主要公司的所有股份都成为可交易的。这导致了一连串的大多是最大的国有公司，银行及公用设施发起非常有利可图的首次公开募股（IPOs） ，并利用人们的庞大储蓄。在过去两年中，中国主导的全球公开招股占2007年的35 ％。在今年头几个月，由于市场大幅下跌，这种"上市泡沫"已经进入突然停顿。许多顶级公司现正以低于它们首个交易日的价格进行交易，留下易上当受骗的'投资者'在那里暴跳如雷。这个过程由中石油象征性地表现出来，去年10月当该公司漂浮在上海交易所时，它暂时性地成为世界上最有价值的公司。自那时以来，该公司的市值下跌了62 ％，-这发生在一家伴随着石油处在100美元一桶的价位时的石油公司身上！
  
2005-07年中国的股市泡沫目前已破裂，并进一步造成严重的经济问题。基于兴旺的价格或股票，主要企业已越来越少地依赖于银行的资金并能规避中央政府用来遏止过度投资和它的必然结果：能力过剩，利润下降，并有可能破产的贷款限制。尽管政府努力遏制这种增长，2007年固定资产投资增长了惊人的24.8 ％ ，高于2006年0.9个百分点。

几乎可以肯定，近两年来的首次公开招股的热潮帮助把投资泡沫推高到了荒唐的新的高度。它也使得以千百万计的小型储蓄户取出储蓄而投入到股票市场这个'赌场'里 。讽刺的是，自1949年革命以来，赌博在中国是非法的。理由很充分！许多中国的新一族的小'投资者' 现在正再次面对灾难性的损失，其结果能够导致政治上的不稳定。一位退休女服务员张莉颖（音译）向国际先驱论坛报（ 2008年4月2日）说："我的丈夫责怪我那么愚蠢以至于失去了我们全家的积蓄。" 互联网聊天网站充满着对政府的愤怒的评论，并为市场的破坏性滑坡而指责他们。

因此如果'熊市'继续下去，可能会有更多的经济危机影响，这是最有可能的，因为中国的金融业也受到世界市场的动荡的严重影响。一些评论家淡化股市的意义，因为即使有1亿5千万份个人交易帐户，中国市场也没有老的工业化国家那样的"财富效应" ，在这些老的工业化国家，40% ， 50%或者至60 ％的人口拥有和股市有联系的储蓄。但就中国的情况而言，很多的个人账户其实是公司甚至银行所用的"假帐户"以便在市场中投机。这样高的非法的交易产生了去年主要的中国公司利润的相当大的一部分-根据某种估计是百分之十五到二十。香港JP摩根的乌尔里希京解释说："公司有大量的过剩现金，而且大量的这样的现金漏进了股票市场" 。 [国际先驱论坛报， 2008年4月2日] 。
  
大炒家在市场套牢前都抽离了，留下小股民去承受惨重的损失。由于原材料和能源成本的上升以及更困难的出口前景，还有生产能力严重过剩的作用，企业无论如何都要面临利润的压缩，这个时候，延长的熊市，关闭额外地"快速获得"利润的这一来源，对中国的大公司的资产负债表有不利影响。这些过程都是自我强化的。最近几天大公司如中石油和中国电信的一连串的盈利警告助长了股市的低迷。另一个市场大跌的原因是将有今年的第一次的加息以作为政府反通胀政策的一部分的传言。
  
来自20世纪90年代的教训-突发的危机
  
中国的经济景观以惊人的速度变化着。去年主导经济争论的是'过热'的危险。然后在今年1月份，随着该国政府宣布由过去四年中实施的"谨慎"的财政货币政策转到"紧缩"的预算政策，通货膨胀的祸害显得很大。如今，在全球性危机的阴影下，这种情况正在发生变化。如果粮食和原材料（包括能源）价格被排除在外，中国的经济数据仍显示出显著的通货紧缩的特点（通货紧缩是通货膨胀的反面：价格下跌），特别是在制造业和出口部门。减去食品和能源后的通货膨胀率只有1.6 ％ ，而不是8.7 ％ 。纺织品价格，在中国已下跌了0.6 ％ ，而以去年为例，在电子产品，钢铁和汽车方面也有类似的价格下跌。

这些压力作为大规模-但无纪录的-整个行业中的过剩能力的结果和作为有史以来最大的投资热潮的结果而强化。产能过剩，由于全球经济低迷而更为恶化，意味着更多的商品追逐较少的市场，必然有价格下跌的压力。在某一个点上，利润将消失以及公司倒闭。从那里开始，连锁反应至银行和通过借款以支付他们的投资热潮的大多数国有公司。
 
不良贷款的爆发可能即将来临，预示着的严重性不亚于美国的银行危机，尽管具有不同的特点。在这样一种情况下实施的旨在限制信贷和压缩通货膨胀的"紧的"或限制性的财政政策将是灾难性的。不仅中国政权将被迫迅速改变方向到扩张性或"凯恩斯主义"的政策下，一些评论家认为，这已是未阐明的目标了。汇丰中国首席经济学家曲红彬（音译）说："我期望大陆是半心半意地实施其货币紧缩政策并能根据情况在一定程度上放宽该政策 " 。作为很具影响力的周刊的新华的展望杂志最近也有一篇文章要求中国政权"为美国经济衰退作好准备" 。
  
但不只是美国经济衰退！中国的经济可能很快将面临类似十年前东南亚资本主义经历的萎缩，尽管是一个更大规模上的萎缩。在20世纪90年代中期，因为东南亚的经济经历了快速的投资驱动的增长，它们的货币升值迅速。然而，到1997年，其出口的引擎开始减速，因为便宜的生产者-包括中国-分食了市场份额。投机的"热钱"已经涌入这些国家以便利用这次繁荣期，"热钱"的突然抽回，造成第一次信用和银行危机（并非完全不同于今天的美国危机），然后是一波企业破产的浪潮和严重的经济衰退。在美国资本主义和国际货币基金组织的帮助下，他们被迫接受的政策完全与布什政府和美国联邦储备委员会今天实施政策相反，即大规模的连续加息和'紧缩开支的预算。
  
这一梦魇般情景不是我们马克思主义者想象中虚构出来的事情。到目前为止，世界银行已修订其中国增长预测两次，一月修改为从10.8 ％至9.6 ％ ，上周再次修改至9.4 ％ 。这是一个增长预期的大幅度减少，减少1.4 ％ 。不过，中国国际资本公司（中金公司）财务公司刚刚公布了更危言耸听的预测，其警告明年国内生产总值增长率可能会下降至7.5 ％ 。中金公司经济学家在他们的研究报告中指出："中国的经济正处于一个十字路口。""如果政策调整不适当的话，这一年经济可能面临高通胀，，但明年可能演变成停滞" 。在这种情况下，中金公司警告说："中国的失业率和银行不良债务将显着上升，公司的利润将大幅萎缩。"
  
对中国而言，增长率处在百分之七左右将表明其已经处在衰退的边缘，这尤其将会对劳动力市场产生影响，作为可能的结果是爆炸性上升的城市失业率。每年， 1000万个新的城市求职者涌向市场，这还不包括增加着的农村移民劳动力。过去的4-5年，中国经济以双位数字增长，而创造的就业机会只增加了1 ％ 。几个因素，其中包括由北京奥运以及在一些冬季雪灾中受灾最严重地区一个短期的投资热潮创造的的建筑和服务领域里的数以万计的临时工作，明年将消失，增加了减速甚至衰退的可能性。
 
因此很显然，中国的经济正在走向未知不详之地。经过20年的基本上持续快速增长后，放缓，或低迷将在中国社会创造前所未有的紧张局势，包括执政党内的公开的分裂和爆发民众抗议。因此在面对日益增加的资本主义打击中，建立战斗的和民主的工人组织-特别是独立工会和工厂委员会-来争取工人的利益的需要比以往任何时候都更大。
 
注：在外汇交易的背景下，中国法定货币是所谓的'人民币' （人民的钱），但国内交易中称为'元'，即人民币是货币，但纸币和硬币是元。
China's economy - the sound of bubbles bursting

Stock market slumps, profit outlook darkens, while inflation threatens more instability

Vincent Kolo, Hong Kong

Nothing is going right for the Chinese regime in this Olympic year. While China's economy is still, based on current projections, expanding at double-digit rates, the global capitalist crisis arising from the bursting of the giant credit bubble in the United States gets closer to China every week. In particular, the collapse of the dollar, now a "subprime" currency, especially since the US central bank (Federal Reserve) has panic cut its main lending rate by 3 percentage points in six months, to 2.25 percent, is beginning to inflict real pain on China's economy. Not for nothing did Premier Wen Jiabao recently say he was "deeply worried" by the falling dollar.

The renminbi's rise against the US currency has led to some of the features of a recession in southern China's export powerhouse, the Pearl River Delta (PRD), a region that accounts for one-eighth of China's GDP. Based on some estimates, 1,000 shoe factories have closed down in this region in the last year, most of them moving to cheaper, less regulated inland provinces, or to Vietnam and other lower-wage economies. The local government in Dongguan, an industrial city in the PRD, recently announced a new fund to help foreign companies there upgrade technologically, to shift out of labour-intensive lines such as footwear and textiles, which have faced the brunt of the renminbi's rise.

The dollar's fall affects China in a number of ways, firstly in a marked slowdown in export growth (not yet a contraction). China's legendary trade surplus plunged 64 percent in February. Based on the first two months of this year, exports to the US market are stuck at the same level, compared to a 14 percent growth overall for 2007. But the dollar's slide has also led to a fresh flood of "hot money" into China, as speculators jostle to preserve the value of their capital by buying into rising currencies like the renminbi. On present trends, the Chinese currency is set to appreciate by a further 7 percent this year against the dollar, after climbing 15 percent in the past two years. The speculators are even gambling on a larger, one-off revaluation, possibly triggered by the Beijing regime's desire to purge inflation, running at an annual rate of 8.7 percent. Such a move cannot be ruled out, although it depends on where the regime sees the greatest danger: from food riots and protests driven by inflation, or from a wave of factory closures and possible strikes in the export sector brought about by currency appreciation.

Fear of inflation

Few regimes in the world fear inflation more than China's misnamed 'communist party'. Inflation was an important ingredient in the revolutionary upheavals of 1949 and also 1989. Inflationary pressures, especially galloping food prices, which are 23 percent higher than a year ago, were undoubtedly also an important factor behind the riots in Tibetan areas last month, which combined with pent-up discontent over religious and national persecution to produce the worst unrest in Tibet for 20, perhaps 50 years. The Beijing regime has ordered universities across China to increase subsidies in their cafeterias, fearing possible unrest among students, another phenomenon conjuring up images of 1949 and 1989.

Like the governments of Indonesia, Egypt, Morocco, Argentina, Mexico and several other countries, the Chinese regime has reintroduced price controls on basic foodstuffs such as cooking oil and rice, but these are not particularly effective given that the state no longer controls the food distribution industry. "Administrative control over commodity prices has little effect in the current stage of market development. Businesses and the market have various means to negate State price controls," commented Yi Xuanrong of the Chinese Academy of Social Sciences in China Daily (4 March 2008). And as a top regime economist, Gao Huiqing, said last month, "China is in the wagon of the world economy in terms of globalisation. But it is not the helmsman. As 70 percent of mainland price rises can be attributed to international factors, the nation cannot tackle the problem on its own." [South China Morning Post, 19 March 2008].

China is now a major importer of farm produce such as soja beans, corn and meat, and domestic farm prices increasingly reflect world market prices, which have hit historic highs and are set to stay there. "World agriculture is in crisis," stated a new report from the International Food Policy Research Institute, quoted in China Daily (22-23 March 2008), pointing among other things to extreme weather phenomena, shrinking land availability, increased consumption (as in China) and bio-fuel production. This report went on to warn surging food prices are "a major political concern". In the short-term, the price hikes have lifted incomes for some farmers, while a large section of society, both urban and rural, and especially the poorest strata, are substantially worse off now compared to a year ago. The severe winter in southern and central China, combined with a two-year drought in northern China, has damaged one-sixth of the country's arable land, putting further upward pressure on farm prices this year. This is why the government has designated the fight againt inflation its 'number one' priority. But as Chinese workers and peasants know, there is a huge gap between the regime's stated intentions and its actual results!

The actions of the US Federal Reserve, in drastically cutting interest rates, has seriously limited the room to manoeuvre of the Chinese regime and central bank. Despite the loosening of its peg to the dollar in 2005, the renminbi is still closely tied to the greenback. But interest rates in the two economies are diverging sharply, as the "subprime" crisis deepens. After raising interest rates six times last year, to put a brake on an overheating economy, the People's Bank of China's (PBoC) base lending rate is currently 7.5 percent, compared to a rate of 2.25 percent in the US. This has sucked a fresh wave of speculative capital into China, presenting a number of problems for policy makers. In the first two months of this year, China saw foreign direct investment (FDI) surge 75% above the level for the same period last year, to $18 billion. Should this trend continue for the whole year it would mark a new FDI record.

This capital must be 'sterilised' by the central bank, by replacing dollars with yuan, leading to a further unwanted expansion of the money supply, which in turn fuels inflation. Much of this foreign 'investment' is purely speculative, ploughed into real estate deals which help drive up land prices thereby feeding a monstrous property bubble that could burst at any time, and in some coastal regions may already have burst. The Wall Street Journal reports that property prices have declined by as much as 30 percent in some top-tier cities, adding that "China's property developers are under siege. Property prices are showing signs of weakness in many of the country's key markets, and capital markets have all but seized up for these - and other - offerings." [Wall Street Journal, 26 March 2008].

Property bubble... still inflating

The surge in home prices has compounded problems on other economic fronts. Many ordinary Chinese have been priced out of the housing market. In the 70 largest cities, overall house prices surged 11.3 percent in January from a year earlier, the biggest increase for three years. Super-rich property tycoons have amassed phantasmagorical personal fortunes - they regularly top the various ranking lists of China's super rich - a fact that fuels political discontent. Over half the tycoons on last year's Forbes list of China's 40 wealthiest individuals were involved in the property sector.

"This year marks the tenth anniversary of China's removal of its decades-old welfare housing system in 1998," proclaimed an editorial in the 'communist' party-run China Daily (8-9 March 2008). As this paper noted, "While rapidly meeting the need of the few rich, the booming property market has largely ignored the demand of lower or many middle-income families for affordable houses, not to mention the urban poor's need of shelter."

The spiralling cost of housing is one important factor why consumer spending continues to languish at levels far below even those of other 'developing' countries. Last year, consumer spending accounted for around 40 percent of GDP in China, compared to more than 70 percent in the US, and 59 percent even in India. The idea, put forward by many capitalist economists, and by the Chinese regime above all, that the Chinese consumer is poised to 'take up the slack' in world markets caused by falling US consumption, is a fallacy. Chinese salaries are too low, and the cost of basic necessities like housing and schools is too high. Reliable statistics of salaries in China are virtually impossible to find. There is no end of claims that workers in the cities at least have seen 'significant' wage increases in recent years. But this is a fallacy, at most applying to a smaller layer of urban-based workers in the private and especially hi-tech sectors. Only 30 percent of Chinese workers will pay income tax this year, and the threshold for personal income tax is 1,600 yuan (160 euros) per month. So, 525 million of China's 750 million strong labour force earn less than 1,600 yuan a month - a very credible figure. Without huge increases in wages, which the capitalists of course will resist tooth and claw, these workers are excluded from the grand designs of boosting consumption to compensate for the contraction of the US economy.

It is not uncommon for new homeowners to spend half their monthly income on mortgage repayments. A CCTV report (15 March 2008) featured a couple from Beijing who pay over 4,000 yuan a month to the bank for their two bedroom apartment, 60% of their monthly income. In addition to housing costs eating up a growing share of an urban family's income, education and medical costs are also extreme, rising from 10 percent of an urban resident's total expenditure in 1990, to 30 percent in 2006 [China Daily, 14 March 2008].

This explains why solidly neo-liberal agencies like the OECD and journals like The Economist have become welfare-state-zealots in relation to China, urging its rulers to rebuild basic public services as a means to coax the population to save less, and spend more of their still very low wages on consumer goods. For the rural majority especially, health care infrastructure is a shambles. Three quarters of China's total medical resources are concentrated in the urban areas, home to just 35% of its population. According to China Daily (14 March 2008), with 22 percent of the world's population, China disposes of only 2 percent of the world's medical resources. On this basis, the 750-strong rural population, roughly one-eighth of the world's population, have access to just 0.5% of the world's medical resources.

Stock market bubble... burst!

The Chinese stock market has been one of the worst performers in the world in 2008, only Vietnam has suffered bigger losses. The first quarter of 2008 was the worst in the Shanghai exchange's 16-year history, with the main SCI index losing 34% of its value. In financial market jargon a fall of ten percent is a 'correction', while a drop of 20 percent is a 'bear market'. Of course, stock markets in today's world are really over-sized casinos that only indirectly reflect processes in the underlying economy. Nevertheless, the panic on the Chinese stock market is both a symptom of impending crisis, but also a source of serious problems for the wider economy.

Since last October's peak, more than 12 trillion yuan of share values has been wiped out, a sum equivalent to half China's GDP. While the stock market was not an important factor in China's economy even four years ago, this changed with the financial sector reforms of 2005, the most important of which meant that all the shares, not just a minority, of the country's major companies became tradeable. This led to a succession of top, mostly state-owned companies, banks and utilities, launching what were very lucrative initial public offerings (IPOs) and tapping into the huge pool of savings of the population. China dominated the global IPO rankings in the last two years, accounting for 35% of IPOs worldwide in 2007. This "IPO bubble" has come to an abrupt halt in the first months of this year as the market has plummeted. Many top companies are now trading at below the price they realised on their first day of trading, leaving gullible 'investors' in a rage. This process is symbolised by PetroChina, briefly the world's most valuable corporation when it was floated on the Shanghai exchange last October. Since then the company's market capitalisation has plummeted 62 percent - and that for an oil company, with the oil price at $100-a-barrel!

China's stock market bubble of 2005-07, which has now burst, caused further serious problems for the economy. Based on the booming price or equities, major companies were less dependent on the banks for funds and were able to circumvent central government lending constraints designed to curb over-investment and its inevitable results: overcapacity, falling profits and possible bankruptcy. Fixed-asset investment grew by a staggering 24.8% in 2007, 0.9 percentage points higher than in 2006, despite government efforts to rein in this growth.

The IPO mania of the last two years almost certainly helped to lift the investment bubble to a new level of absurdity. It also pulled millions of small savers into the stock market 'casino'. Ironically, gambling is illegal in China, since the revolution of 1949. And for a very good reason! Many of China's new breed of small 'investors' are now nursing catastrophic losses and, once again, the result can be political instability. "My husband condemns me as so stupid that we lost our family's savings," said Zhang Liying, a retired waitress, to the International Herald Tribune (2 April 2008). Internet chat sites are full of angry comments turning on the government, and blaming them for the market's devastating slide.

And there is likely to be more economic fall-out if the 'bear market' continues, as is most likely, as China's financial sector is shaken by the turbulence in global markets. Some commentators downplay the stock market's significance because even with 150 million individual trading accounts, the Chinese market has not accounted for the same kind of "wealth effect" as in older industrialised countries, where 40, 50 or even 60 percent of the population hold savings linked to the stock market. But in China's case, many of the individual accounts are actually "fake accounts" used by companies and even banks to speculate in the market. This highly illegal trade generated a sizeable portion - 15 to 20 percent by some estimates - of the profits of major Chinese companies last year. "Companies had a lot of excess cash, explained Jing Ulrich of JP Morgan in Hong Kong. "And a lot of that cash did leak into the stock market". [International Herald Tribune, 2 April 2008].

The big speculators mostly got out before the market tanked, leaving the small traders to take the heavy losses. But a prolonged bear market, by closing off this source of additional "quick fix" profits, will have a detrimental impact on the balance sheets of China's big companies, at a time when profits are anyway facing a squeeze from rising raw material and energy costs, a tougher export outlook, and the effects of serious overcapacity. These processes are self-reinforcing. A string of profit warnings in recent days at major corporations like PetroChina and China Telecom has fed the stock market gloom. Another cause of the market plunge are rumours of an interest rate hike, the first this year, as part of the regime's anti-inflation policies.

Lessons from 1990s - sudden crisis

The economic landscape in China is changing at breakneck speed. Last year the economic debate was dominated by the danger of 'overheating'. Then in January, the scourge of inflation loomed large, with the government announcing a shift to "tight" budget policies, away from the "prudent" fiscal policy of the last four years. Now, in the shadow of the global crisis, the situation is changing again. If food and raw material (including energy) prices are excluded, China's economy shows still shows significant deflationary features (deflation is the opposite of inflation: falling prices) particularly in the manufacturing and export sectors. The inflation rate, minus food and energy, is only 1.6% instead of 8.7% a year. Textile prices in China have fallen 0.6% in the last year for example. There are similar price declines in electronic products, steel and autos.

These pressures can intensify as a result of massive - as yet unrecorded - surplus capacity throughout industry, the result of the biggest investment boom in history. Overcapacity, aggravated by a global downturn, means more goods chasing fewer markets and inevitable downward pressure on prices. At a certain point, profits are annihilated and companies go bust. From there, the chain leads to the banks, mostly state-owned, which lent to the companies to fund their investment binge.

An explosion of non-performing loans could be just around the corner, threatening a banking crisis every bit as serious as America's, albeit with different features. In such a scenario a "tight" or restrictive fiscal policy aimed at limiting credit and squeezing inflation would be catastrophic. Not only would the Chinese regime be forced to rapidly change direction towards an expansive or "Keynesian" policy, some commentators believe this is already its unstated goal. "I expect the mainland will be half-hearted in applying its tight monetary policies and loosen to some extent when the situation demands." argued Qu Hongbin, the cheif China economist at HSBC. Outlook, the influential weekly journal of Xinhua, also recently had an article urging the Chinese regime to "prepare for a US recession".

But it's not just a US recession! China's economy could soon be facing a similar crunch to that experienced by South East Asian capitalism ten year ago, although on a much larger scale. In the mid 1990s, South East Asian currencies were appreciating rapidly as their economies experienced rapid investment-driven growth. By 1997, however, their export engines began to slow as cheaper producers - China among them - ate into their market share. The speculative "hot money" that had flooded into these countries to take advantage of the boom, pulled back abruptly, causing first a credit and banking crisis (not wholly dissimilar from the US crisis of today) and then a wave of corporate bankruptcies and a severe recession. This with the help of US capitalism and the IMF, who imposed policies completely opposite to what the Bush Administration and Federal Reserve are doing today i.e. massive interest rate rises and 'austerity' budgets.

This - nightmare - scenario is not a figment of our, Marxist, imagination. The World Bank has so far this year revised its growth forecasts for China down twice, from 10.8% to 9.6% in February, and last week again, to 9.4%. This is a substantial reduction, of 1.4 percent, in growth expectations. But a more alarmist prognosis has just been released by the financial company, China International Capital Corp (CICC) which warned GDP growth could slip to 7.5 percent next year. "China's economy is now at a crossroads," CICC economists wrote in their research note. "If policy adjustments are not appropriate, the economy may face high inflation this year but could turn sluggish next year." In that case, warned CICC, "China's unemployment rate and banks' bad debt will markedly rise and companies' profits will shrink substantially."

In Chinese terms, growth of around seven percent would be a borderline recession, especially in terms of the effect this would have on the labour market, with an explosion of urban unemployment as the likely result. Every year, 10 million new urban job seekers come onto the market, not including the increase in the migrant labour force. As it is, with double-digit growth, employment has only grown by 1 percent a year over the last 4-5 years. Several factors, including the tens of thousands of temporary jobs in construction and services created by the Beijing Olympics, and a short-term investment boom in some of the worst-hit areas of winter strife, that will not apply next year, increase the likelihood of a slowdown and even recession.

Therefore clearly, the Chinese economy is headed to uncharted territory. After two decades of largely continuous rapid growth a slowdown, or slump, will create unprecedented tensions in Chinese society including open splits in the ruling party, and an explosion of popular protest. The need for fighting and democratic workers' organisations - especially independent trade unions and factory committees - to struggle for workers' interests in the face of increased capitalist attacks, is therefore greater than ever.

Footnote: The Chinese currency is called 'renminbi' (people's money) in the context of foreign exchange dealings, but 'yuan' when used for domestic transactions, i.e. renminbi is the currency, but the notes and coins are yuan.