No one disputes the premise that China is the Worlds fastest emerging Economic Super Power. But who questions the Chinese Governments data? How can we just blindly trust all the economic data that comes out of China? China may be embracing Capitalism but it is certainly not transparent and this will definitely limit its future successes.
All outsiders solely rely upon the data released by the Chinese Communist Party and it is a real concern that all the Bankers and Economists who are investing in the region cannot trust the data that they rely upon to make their financial decisions.
A recent example of the deceptions coming out of China is the increase in housing prices over the last year. The Chinese Statistics Bureau put the rise in housing prices at 1.5% in the last 12 months, whereas the Chinese Real Estate Association put the figure at 22%. If this discrepancy doesn’t sound alarm bells for investors, how about the grossly undervalued Yuan and China's alleged 2.7% rate of inflation.
Foreigners understand one stereotypically Chinese feature and that is the fine art of 'saving face'. 'Saving Face' is considered by some as socially acceptable conduct that allows people to lie if that lie protects them from the dishonour of the unfavourable truth. So there is nothing to stop China from only releasing its 'good news' and sweeping all its 'bad news' under the carpet. The problem is that one day all this compounded bad news, which gets swept under China's enormous carpet will leak, undoubtedly causing economic Armageddon.
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