Gordon Chang
speaker
524 appearances
9 recordings
2 series
first heard Nov 2024
last heard 23 May
Gordon Chang’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 2 in all, peaking in May 2026 with 1.
Appearances
And a lot of Chinese people are not very happy about this situation right now, which is the reason, and here this is for Michael Baker, the economist, that's why we're seeing record amounts of both legal and illegal capital flight from China. That doesn't happen when you're growing at 5%, as Xi Jinping claims, which is his target.
It happens when your economy is about zero, which is where China is right now, because of the deflation, and you've got the debt overhang. So this is a pretty grim situation. It's not insoluble, but it is insoluble if it's countries led by a malice. And that's where China is right now.
A lot of it is going out to Hong Kong, which is part of the People's Republic, but it's outside of China's currency walls. And then from there, it goes all over the world. It goes into the United States, goes into Europe, goes into... Southeast Asia. But money is leaving in really big numbers.
Wall Street Journal did a story not too long ago in October, which said that by their estimation, and these numbers are very rough because China doesn't tell us the truth. But the Wall Street Journal said that the amount of illegal capital flight in the four quarters ending in June of 2024 was $256 billion. That's a pretty big number because that's in addition to the legal capital flight.
So, we're seeing money leave China, which is a real indication. And we're seeing all sorts of very strange phenomena in the Chinese financial markets right now. So, this is a problem that is getting worse by the week. And as I said, it's not insoluble, but it is when you have someone who is ruthlessly determined to pursue misguided policies.
That's a really important question. There are a couple of things they can do. One of them is they leave. We have an unprecedented number of Chinese migrants from both our northern and southern borders. Some of those people are dangerous elements, but most of them are just people who are desperate to live in a free society.
The other thing that you do is you keep money offshore, and there are a number of illegal but simple ways to do that. The other thing is you buy gold. Gold is basically capital flight for the poor, because they can't get their money out, but they can get their money out of renminbi-denominated assets, local currency assets. So you buy gold, because gold has an international value.
I mean, its price is set by global markets, not by inside China. Yeah. So, there are those things that you can do. But the other thing you can do is, and this is really fascinating, you just opt out of society. You got a lot of young, middle-class Chinese who are really privileged, who have just said, I'm out of this country.
And they can't leave, many of them, but what they do is they, quote unquote, retire. That's the phrase that's being used now. They retire to the countryside and they become farmers. Or they just do nothing. They just sit in their rooms and opt out of society. So those are the ways that people are reacting. There is unprecedented gloom in Chinese society.
And the one place we can see this is plummeting birth rates. Because their people are so pessimistic, they do not want to raise a child in China.
He probably doesn't have that much support, but he is able to coerce people. And in the absence of love and adulation and all the rest of it, that's where he's right now. No one wants to take him on. But we are seeing some really interesting phenomena, for instance, in the Chinese military.
So Chinese military propaganda is sort of like a, normally it doesn't say very much, but now we are seeing all of these pieces that praise, quote unquote, collective leadership. In other words, not one man rule, which is associated with Xi Jinping. We were also not seeing something in Chinese military propaganda. And that is, we're not seeing as much of Xi Jinping as you normally do.
And that leads some people to believe that maybe Xi doesn't have as much support in the Chinese military as he once did. And that's important because the People's Liberation Army is the biggest power block in the Communist Party. Especially since the middle of 2023, there have been extraordinary number of purges and suicides among senior officers, especially in the rocket force.
And everybody has sort of assumed that this was Xi Jinping purging people that he had previously picked. Well, that's one explanation. And maybe that's the most, certainly it's the most prevalent explanation you hear. But the other explanation is that people who are Xi Jinping's opponents are purging Xi Jinping's people. And there's evidence for that conclusion as well.
The bottom line, Mike, we don't know. But the point is, we are seeing things that clearly show instability and intense infighting at the top of the Communist Party, including the Chinese military, which, by the way, is a party organization. So things are just uncertain and they're unstable.
I think party elders, and these are former leaders, they haven't fared so well. So, for instance, if we go to October 2022, Communist Party's 20th National Congress. You see Hu Jintao, who was Xi Jinping's predecessor, being escorted out of the meeting. And Hu Jintao was only seen in public once since then.
That was at the funeral ceremony memorial service for Jiang Zemin, who was Hu Jintao's predecessor. But there are reports that Hu Jintao and his family have been detained. And I think that those reports are credible. So it hasn't gone very well for people who have expressed opposition to Xi Jinping.
As I said, nobody really likes him because, you know, among other things, he has denied opportunities for other people. You know, under the Communist Party's system, before Xi Jinping took over, he was going to have a 10-year term at the top, and then somebody else would step in.
Well, by getting an unprecedented third term, what he's done is he's prevented a whole slew of leaders from coming to the fore. They don't like that, of course, but they don't feel that they're in a position to actually oppose Xi Jinping. It's only the guys with the guns, People's Liberation Army, that actually feel that they can say what they want. So this is a fascinating situation.
Yeah, well, he called it reunification, which is incorrect because the People's Republic has never ruled Taiwan. And in fact, throughout all of history, No Chinese regime has ever held indisputable sovereignty to Taiwan. I can go and wonk out on you on that if you want, and I'd love to do that, but let me just put that to the side for a moment.
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