Lang Xianping: China’s Economic Depression Has Begun

"Chinese Government Has Gone Broke!"

On October 22, Lang Xianping, an economics professor at the Chinese University of Hong Kong, gave a private talk in Shenyang City, Liaoning Province. 

He cited statistics showing why the Chinese Communist Party (CCP) 

is trapped in an economic crisis and is at the brink of bankruptcy. Some scholars say that Lang’s conclusion is not surprising at all, as they themselves hold the same view. 

Lang Xianping’s speech, which was widely circulated online, pointed out that the CCP’s official published growth rate of 9.1% and its inflation rate of 6.2%, are false. Instead, he says, China as a nation, is bankrupt.

Lang Xianping: "The 9.1% figure is false. The inflation rate of 6.2% is also false. Inflation has reached at least 16%! Do you know how to calculate the gross domestic product (GDP) figure? Nine minus six.

The actual growth rate, according to the CCP’s data, should be less than 3%. What if the inflation rate was 16%? What’s the GDP growth rate? Minus seven percent. The situation is this serious.”

Professor Lang said that all of the CCP’s current policies are covering up the deep, murky reality of China’s economy. He cited the Purchasing Managers Index to explain that back in early July, China’s economy already entered a recession. 

Lang Xianping: “The Purchasing Managers Index, which was just released, showed a reading above 50. This indicates normal economic growth, while below 50 means the country is entering into a recession. Now among China, the U.S., and Europe, let me tell you, the first country that has gone into recession is China. It started in July. But has anyone reported the news? No! No one is allowed to report it.”

Now, China's stock market fell from 3,000 points in April, to 2,313 points in October. But other markets such as property, cars, luxury goods, antiques, and art, among others, are really booming. The co-existence of such a “bleak winter and boiling summer”  only takes place in China. The basic reason is that China’s manufacturing Industry crisis has just begun. 

Lang Xianping: "Field research conducted by The Economic Observer, a weekly Chinese newspaper, shows that the production rate of the apparel industry in Jiangsu Province and Zhejiang Province, is less than 33%. The plastic industry is 50%, the rubber industry is 60%, the soybeans extraction industry is less than 30%. My own survey shows that at present, 60% of all leather-processing plants have shut down in Haining, China."

Professor Lang also cited that although the total capacity of China’s power plants is 916 million kilowatts, the utilization rate is only 40%. By June 20, the volume of iron ore piled up in China’s various ports has reached 98.9 million tons, far more than the 7,098 tons imported during the period of financial crisis of last few years. This data shows that an economic depression has begun in China. 

Professor Lang pointed out that 70% of China's GDP came from infrastructure construction, which, in reality, has not brought any economic benefits to the country. For example, before the former Soviet Union collapsed, 70% of its GDP relied on military engineering projects. The current situation in China is very similar to that of the former Soviet Union. Once China’s manufacturing industry pillar collapses, the country’s seemingly impressive infrastructure construction would not last long. 

Within five days of the online posting of Professor Lang’s over- 4-hour speech recording, nearly 80,000 hits were racked up. Many netizens were awakened from their slumber. Others expressed concerns over the consequences of Professor Lang’s truth. 

Xie Tian, a professor at the Aiken Business School, University of South Carolina, said that Lang Xianping’s theory of China’s bankruptcy is not alarmist in nature. Many experts and scholars have already talked about China's economic paradox and crisis.

Xie Tian: "For us overseas researchers of China’s economy, this is not surprising news at all. In fact, we’ve been talking about this over the past two years.”

Xie says that most Chinese people spend 40-50% of their income on eating and daily necessities. When the prices of daily necessities rise, the actual purchasing power, adjusted for inflation, shows that China's economy is declining. However, Chinese people are still kept in the dark as they cannot obtain real data from the CCP reports. 

Xie Tian: "In the economic field, the CCP has always been making up lies, from top to bottom. Even the CCP’s vice-premier admitted that when he was governor of Liaoning Province, he did not believe the CCP’s reported economic data. Instead, he used concrete statistics such as rail transportation volume and power generation figures, and the like, to determine the true state of the economy.”

Xie Tian also commented that there now exists a long-standing phenomenon among CCP officials at all levels, namely, “figures determine an official’s position, and an official reports on figures."