China's stock market downturn big reveal the truth for a long time

China's stock market downturn big reveal the truth long-term debt crisis worse is China's stock market downturn in the root cause of the long-term? China to buy a huge amount of beauty in Chinese stock market long-term debt is the root cause of the downturn? Currency to trigger export-oriented of small and medium-sized enterprises in China's stock market was near collapse is the root cause of long-term downturn? This series of events can only say that directly or main reason, China's stock market downturn long-term is the root cause of this! Local debt crisis is the root. According to the national audit office statistics, by the end of 2010, the local government debt balance is 10.7 trillion yuan. According to statistics, 2010 years of the land grant fee is 2.9 trillion yuan, the year 2011 May only 20% last year, pay off the debt of the bank interest is suspended, not to mention the principal. From April this year since, yunnan, sichuan, Shanghai, Harbin, guangdong and other provinces and cities in local government bonds default phenomenon of large area reimbursement, the interest payments. In order to pay his debts, the state-owned assets supervision under the jurisdiction of the many listed companies to cash withdrawal stock market, leading to a serious shortage of stock market liquidity. The land grant fee is the main source of debts, but because the country to start this year to big down the real estate market, strictly limited loans, and also in most parts of China promulgated the limit to purchase, a series of measures against property market, the real estate market,polarized sunglasses especially this year in the second half of the extreme low volume, the land grant fee income natural also appeared down significantly. The real estate market price in have recently started to have inflexion point, prices fell signals are about to all around the country began, the land grant fee income from this will generate more shrink. Local government bonds default probability increase greatly. In 2008 the government in order to promote the economy, through the economic crisis, take the four trillion economic development plan. Unfortunately this four trillion funds inside, close to 80% of the funds are taken by public infrastructure project, however these projects are not close to a quarter of the investment return. Such as foursquare; used as spending and repair, renovation and the government building, change the bus equipment, etc, and also some cash flow into the gray zone. Imagine, these are not the project investment returns. Besides the three quarters of the engineering project, because these basic construction project is permanent construction project is some, such as the western road, high iron, need lots of follow-up funds to smooth completion, but the money has been spent before 7788, project turned into shoddy school project, was in a dilemma in pattern, will no longer spend a small fortune all these projects completed, or cancel the project, but the money before and will all be wasted. Upper department continued to find an excuse to delay the workers pays time, money does not reach the designated position, financing platform and does not provide enough follow-up funds, leading to many engineering were forced to shut down, workers went on strike, etc. Most of the local engineering projects are by local financing platform through the debt and get the capital construction. Below we analyse the local financing platform. Local financing platform, is refers to the local government to launch, through the transfer land, equity, fees, Treasury bonds and other assets, quickly packaging out a assets and cash flow all can reach the standard company financing and, when necessary, again complementary with financial subsidies as reimbursement commitment, in order to achieve the purpose of funds for each, then put money used in municipal construction, utilities and pain of the project is fat. However, local debt in just a few months, has soared to 7 trillion from 4 trillion. According to concerning an expert analysis, as high as 7 trillion or more local debt, may drag down the steps of China's economy has just recovery. Concerning the risks, place the biggest risk for financing platform, is to put the local government infrastructure and public debt of the cause of credit. This is also where the debt crisis of the terrible place. And local financing platform closely is related to the banking industry is, the banking sector is the pillar of the national development, once the problem happened here, other problems may be like dominoes effect in succession as to appear. The local debt or defaults may be far more than previous bank the scale of bad loans, considering the bad bank loans by indirect financing major Banks, China's banking the risks should not be neglected. The rate of increase of bad loans directly affect the income of the bank, and other external factors, the future of banking industry profit will be questioned. Share price is to shift to an earlier date commonly 4 to 6 months reflect the basic corporate, many friends questioned why the bank plate city win rate only six or seven times, but not delayed rise, this is the fundamental reason. (friendship connection) the central government in fact also but consciousness to place the consequences of financing platform, in this year's June 4 ministries and clean up local financing platform company debts, demand local government debt management need to establishing long-effect mechanism, get rid of the history of the soft budget before. About to the budget, here and in relation to an important proposition. China's financial income is about to break through 10 trillion, the management for these financial income for use as a detailed budget, also is the formulation explicit budget system. China's three spending so huge, huge waste of money made no sense, of this happens derived from the lack of a clear budget system. Like the United States and other developed countries have a clear budget system, so the approach can effectively avoid financial funds are large divert, also clear to see every part of the funds whether they can use to use. The United States in history have had similar in four trillion to develop the economy of the plan, but the difference is the United States of money is used to improve people's life, and quality is good but temporary relief part of the financing side facing the big company nervous, because they believe that in the future these big enterprise must be the vanguard of the economic development,discount nfl jerseys also can quote professor lang hsien-ping words, the United States government input is placed in the healthy growth of the company.The last but about a recent news. Shanghai zhejiang to push by guangdong deep place translated pilot, local financing of sunshine gradually. The move by the ministry of finance has been issuing debt place, the implied credit of the central government, local government translated by means of credit for the local government's main body completely credit, this is the place to debt problems the suitable solution. In the current macro economic background, not only to a certain extent consistent with industry "act financial, less money move" anticipation, and strengthen the market to the policy will be expected of directional loose. The local government translated by pilot, is the national financial management ideas important shift, aims to ease local finances, resolve long-troubling investors place debt problem, but after the success of the issue, whether they can use money into practice, and the investment project is the engineering or simply return image municipal engineering, all this time to observe. In short, China is faced with the history of the major challenges, place the worsening of debt crisis will be insolvent China's economic development process of restorative. Four trillion stimulus plan is similar to the great leap forward in 1958 plans, excessive yearning so-called growth Numbers lead to the consequences of will be with for years, or even more than ten years to restore the original normal development track. In 2011 and 2012 is the debt servicing peak, plus size of the impact, the stock market last look good. So, this is the Chinese stock market long-suffering root cause!

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