/biz/ - Business & Finance

Just to put this in perspective: since 1998, China has deficit funded massive infrastructure projects, including the relatively recent construction of 162,000 kilometers of highway projects, enough to circle the world four times. This was a high risk move for the Chinese Communist Party (CCP), because if large returns on these investments fail to manifest through aggressive economic growth, the state will hurdle over a fiscal cliff.

So, if China halting their economy when their state is predicated on growth means that shit has hit the fan.

As the coronavirus spreads, we are going to see how dramatically the Chinese have underreported the death rate of this illness. This is a regime that has a recent track record of misinformation (e.g., the Uyghurs), was rejecting the help of the WHO for weeks, and, mostly importantly, has a critical interest in maintaining the confidence of foreign investors and trading partners.

We are going to see a significant pullback in the coming week(s). But there is no way of telling how bad things are going to get by relying on the fake Chinese numbers. All we know is that it has already shut down the global supply chain for a month. Buckle up gang.