In a closed-door lecture, Larry Lang, chair professor of Finance at the Chinese University of Hong Kong and a well-known Chinese television personality has been secretly recorded as saying that the Chinese economy is on the “brink of bankruptcy”.
Lang who was speaking in Shenyang City, in northern China’s Liaoning Province on October 22 had placed strict restrictions on audio and video recordings of his speech and had forbid the audience against reproducing it. But a leaked audio recording of the speech made its way on Youtube.
The Epoch Times, in an article on Lang’s leaked speech quoted the professor as saying, “What I’m about to say is all true. But under this system, we are not allowed to speak the truth.”
“Don’t think that we are living in a peaceful time now. Actually the media cannot report anything at all. Those of us who do TV shows are so miserable and frustrated, because we cannot do any programs,” Lang was quoted as saying while asserting that China’s Gross Domestic Product is going in reverse.
According to the Epoch Times article, Lang based his assessment of China’s impending bankruptcy on five conjectures.
Firstly, Lang noted that the regime’s debt which sits at about 36 trillion yuan (US$5.68 trillion) was a matter of serious concern. Lang arrived to this calculation by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion).
“But with interest of two trillion per year, things will unravel quickly,” Lang was quoted as saying.
Secondly, Lang pointed out that the regime’s officially published inflation rate of 6.2 percent was fabricated. Lang put the real inflation rate at 16 percent.
Thirdly, Lang asserted that the “serious excess capacity” in the economy coupled with private consumption adding up to only 30 percent of economic activity were ominous signs. Lang was quoted as saying that the plunging of Purchasing Managers Index, a measure of the manufacturing industry, to a new low of 50.7 was an indication of China’s economy going in recession.
Fourthly, Lang stated that the regime’s officially published GDP of 9 percent was also fabricated. According to Lang’s data, as reported by Epoch Times, China’s GDP has decreased 10 percent.
Fifthly, Lang argued that taxes in China were too high with 2010 statistics showing the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 51.6 percent, Lang said.
“Once the economic tsunami starts, the regime will lose credibility and China will become the poorest country in the world,” Lang was quoted as saying.