Tomohiro Ohsumi | Bloomberg | Getty Images
Many Chinese still believe their central government has the capacity to keep the economy by sliding into a recession, just as the idea did during the Asian financial crisis in 1997 as well as the Great Recession in 2008.
“All industries, institutions as well as individuals are running short of cash,” said Zhang Kaixing, founder as well as chief executive of an online asset management company in Shenzhen called Jinfuzi, which means “golden ax.” Jinfuzi, which manages over $4.5 billion in assets, will be the type of investor that will technology funds court.
“Many investors in private equity as well as venture capital funds want to take their money back,” Mr. Zhang said.
Venture capital will be a modest part of the Chinese economy, which by most accounts will be still growing at a quick pace compared with that will of many some other countries. yet the industry’s fundraising problems may be a symptom of a widening malaise.
After many years of easy credit as well as go-go growth, China will be struggling with weakened investment as well as household consumption as well as increasing corporate as well as local government defaults. the idea could present Xi Jinping with his most difficult problem since he became the country’s top leader in 2013. Will China’s 40 years of continuous economic expansion stop under his rule? If so, how will 1.4 billion Chinese react when they realize that will the country’s upward trajectory will be coming to an end?
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Many Chinese still believe that will the central government has the capacity to keep the economy by sliding into a recession, just as the idea did during the Asian financial crisis in 1997 as well as the Great Recession in 2008. Beijing controls the banks, land, foreign exchange rates as well as the media, so the idea can mobilize as well as manipulate them when necessary.
“In China we believe in Keynesian economics,” said Mr. Zhang, the Jinfuzi chief executive, referring to the economic theory that will favors a bigger role for government. “If what’s going on in China were happening inside the U.S., the idea could have been called a recession. yet in China, the government will step in to interfere in significant ways.”
Under President Xi, even economics has become a delicate topic. Many people in China are not willing to speak publicly because even economists aren’t allowed to make downward forecasts.