◎ Major shareholders in China could be thinking of or taking steps to dump newly unrestricted shares in the wake of a worsening economy and slumping market confidence.
◎ The CCP’s claim that migrants workers are returning home to partake in “entrepreneurship” is likely an attempt to put a positive spin on rising unemployment.
◎ China’s declining export surplus has affected the country’s foreign exchange earnings.
◎ The CCP is carrying out a controlled “blow up” of local government debts and transferring the risks to the private sector.
Risk Watch: China’s Social Security and Taxation Changes Could Spark Wave of Business Failure and Unemployment
◎ The tax and social security reform will sharply increase the financial burden of Chinese firms.
◎ SOEs cannot pay interest on their financing liabilities even if they are granted very favorable interest rates, let alone pay principle.
◎ China’s industrial firms’ profits actually fell 6.8 percent in the first quarter of the year.
◎ The central bank’s injections suggest that it does not have enough collateral to print money.
◎ Based on our estimate, implicit debt in some cities and counties was three to four times higher that of their public debt.