China Economy : Into Rough Weather – War Clouds ?

China delivered a one-two punch of negative economic data this week, hitting first with an initial report on factory activity falling to a nine-month low and then with inter-bank lending rates rocketing to a record high. One of the Central Bank’s aim is to slow the growth of China’s ballooning debt and stop easy access to credit.The country’s total debt is estimated to stand at more than 200% of the GDP when debt from the central government, local governments, corporations and households are included. Fitch the ratings agency cited expansion of easy credit and structural weakness in China’s economy. Some China watchers fear the country will miss its self-imposed 2013 growth target of 7.5%.

The gloomy numbers keep fears alive that the world’s second-largest economic engine is not just slowing down — but also seizing up.

What does this mean? Simple you loaned too much and to cover that you are now taking more loans!!

As is everywhere – Bad Economics influences Bad Politics and angry Politicians lead countries to War. Now who all would be the adversaries in this fight ?

Sun Tzu the Great Chinese Tactical advisor had said 2500 years ago:

  1. Their aim must be to take all under heaven intact through strategic superiority.
  2. It is the doctrine of war that we must rely on the fact that we have made our position invincible.

Musashi Miyamoto , Japan’s most famous samurai warrior and combat strategist had never lost a fight because of the concept of Jigen- ru. The concept that was developed 500 years ago states that is in a sword fight, the one who strikes first wins and comes out live. This simply means that if you have no choice, but to try again, it means your fate is sealed. According to Sun Tzu, an ancient Chinese military general, strategist, and philosopher from the Zhou Dynasty, when you are deciding the adversary, practicality dictates that you consider the following:

  1. Moral Influence: People wanting their money back tend to be in complete accord with their ruler so they will follow him regardless of their lives, undismayed by any danger.
  2. Weather: Signifies day and night, cold and heat, times and seasons.
  3. Earth : Comprises of distances, danger and security, open ground and narrow passes and the chances of life and death. Fighting close to come does not compromise your supply lines – the lifeline of an army.
  4. The Commander: China’s Peoples Liberation Army controls the economy and policies –they stand the maximum to loose, a cause worth fighting for with all courage and strictness.
  5. Method and Discipline: The marshaling of troops, graduation of rank, the supply lines and control of expenditure.

So who do you think they will choose to go to war? Remember in today’s world wars are fought not only on the ground but on the Economic Front as well .

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