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Thursday, April 7, 2016

CHINESE KLEPTOCRACY: here's the problem


WaPo - more relatives of China's top leaders implicated in Panama papers. Here's why you should be worried:

(1) If Xi Jinping really cares about rooting out corruption, now he's going to have to go after his own comrades, and that means civil war. Which is bad for Chinese growth and demand.

(2) If Xi has been a corrupt crony all along, then that indicates China is well on its way to becoming another kleptocracy like Russia. Which I guess we already knew, given their GINI. That means you can forget about the Chinese economy: kleptocracies exist to enrich the elite, not to grow or earn profits for others.

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