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Jeff Wang, November 8, 2018
The Chinese government has been gradually tightening its foreign exchange controls to the great detriment of enterprises and citizens, as well as the country’s economic vitality. What are the reasons for this heavy regulation, and what does it tells us about the economic and political state of China?
Over the last two years, members of the Chinese middle class have found it increasingly challenging to access foreign exchanges or make international remittances.
Ms. Zhang (张女士), a Chinese woman who had immigrated to the United States and who declined to disclose her full name, returned to Beijing this October to sell her apartment. However, the process of sending the money to the U. S. has proved a daunting experience.
“I’m still stuck here waiting,” she said. “I see exchange rates for the dollar get higher every day, and I think about how much I’m losing.”
The obstacles that Ms. Zhang faces have been commonplace in China after the authorities started tightening up on foreign exchanges in the second half of 2016.
In January 2017, the China Foreign Exchange Administration announced new rules that, in addition to maintaining the $50,000 per person limit on foreign exchanges, required purchasers to fill out a form, the “Application for Foreign Exchange Purchase” (个人购汇申请书). Additionally, purchases of foreign exchanges could not be used for buying real estate or making investments in securities overseas.
This January, the Foreign Exchange Administration also stipulated in its “Notice on Regulating Large-Scale Cash Withdrawal Using Bank Cards While Abroad” (《关于规范银行卡境外大额提取现金交易的通知》) a 100,000-yuan limit on overseas withdrawals when using a Chinese-issued bank card.
In June, the daily limit for Chinese citizens to withdraw foreign cash deposit from bank was reduced to $5,000 from $10,000. Many banks decline transaction requests by saying they lack sufficient foreign cash.
On October 10, the government issued its trial version of the “Anti-Money Laundering and Anti-Terrorism Financial Management Measures for Internet Financial Institutions” (《互联网金融从业机构反洗钱和反恐怖融资管理办法（试行）》). Per the Measures, customers who make trades with online financial institutions in excess of 50,000 yuan or foreign money worth more than $10,000 must have their transactions reported to the government.
As Beijing tightens the financial screws, Ms. Zhang has found herself being given the short end of the stick. “A lot of people, including me, are looking for relatives and friends we can give our renminbi (yuan) to, asking them to use their quota to exchange as many dollars as we can. But after making the exchanges, we run into a huge problem: how to remit the money overseas?”
She said that in order to bypass foreign exchange controls, ordinary Chinese use the “ant move” method to incrementally transfer their exchanges.
In addition to controlling foreign exchange transactions by individual citizens, the authorities also aim to limit capital movement on the part of private enterprises. Hu Liren (胡力任), a private entrepreneur living in the United States, said: “At present, China’s [private enterprises] foreign investment has basically stopped. Although there’s no law banning it, it has in fact stopped, because foreign investment requires a process, which in turn depends on government approval.”
Such policies started in 2017. In the first half of last year, China’s foreign direct investment fell by 40 percent, the first time since 2015 that it has decreased so sharply.
An extreme example is that in 2017, the Chinese government obstructed Wanda Group in the process of making a large-scale overseas merger and acquisition. The China Banking Regulatory Commission prohibited large state-owned banks from granting loans to Wanda for overseas M&A projects. At the same time, the authorities, making reference to private enterprise groups such as Wanda and Anbang, and forced them to sell their overseas assets and transfer the funds back to China.
The Chinese government has also used administrative measures to delay the withdrawal of foreign capital. In 2016, Deutsche Bank sold more than 3 billion euros of shares in China’s Huaxia Bank in China, but it took nearly a year before the money could be moved out of the country. In September of that year, when a large Japanese economic delegation visited China, its members made direct complaints about the procedural obstacles that Japanese companies faced when trying to withdraw capital.
The impetus for the rapidly tightening bureaucratic measures comes from the serious loss of foreign exchange capital in China in the past few years. According to the Chinese Academy of Social Sciences, during the two-year period from 2015 to 2016 — when losses of foreign exchanges reached a peak — capital outflows recorded in China’s international balance sheet reached $1.28 trillion.
It is a market truism that private enterprises and individuals convert their renminbi assets into U.S. dollars and transfer them abroad. This is the main reason for China’s capital loss. Ye Zhao (叶昭), a former finance journalist who lives in the United States, described four grades of capital outflows:
“Once a family makes a few million, it first sends its children abroad; if they make tens of millions, the whole family will emigrate. The ones with hundreds of millions will set up business overseas. If billionaires are leaving China, that means their decisions have are political, and it has become too difficult for them to do business in China.”
It can be said that entrepreneurs and common people have concocted brilliant schemes to transfers their assets abroad. In addition to the aforementioned “ant move” adopted by members of the middle class, private enterprises have funneled large amounts of funds out of China chiefly by means of foreign investment and “underground money houses.” The two giants, Anbang and Wanda, took out loans from Chinese banks and used the money to buy up large amounts of overseas assets.
Ye Zhao said: “I have been in touch with these entrepreneurs. Speaking directly, they told me that one of their motivations is to explore business opportunities that might be available overseas, and the other is to have an escape route in case they are implicated during the investigation of some corrupt official.”
Ye Zhao’s words point to a fundamental dilemma among private enterprises operating in China. Since the marketization of the economy, China’s private enterprises have been carrying a so-called “original sin,” namely, that in order to flourish, they have no choice but to resort to illegal means including tax evasion and illicit collusion with officialdom. These illegal acts and their potential legal consequences have become the “Sword of Damocles” hanging over the heads of many entrepreneurs.
Recent changes in China’s political and economic situation have squeezed the private sector. Since 2011, China’s economy has been in a downward spiral, with domestic consumption sluggish and the market running out of space for expansion. Private enterprises face many obstacles such as high tax burdens and difficulty in acquiring loans.
Meanwhile, the trend of “the state advances, the private sector retreats” (国进民退) has become increasingly prominent, and the living space of private enterprises has been gradually eroded by state-owned enterprises. Earlier this year, someone even opined that private enterprises should be eradicated. The difficult environment has forced private companies to seek overseas investment.
The Chinese middle class is feeling likewise constrained. Kai Wen (凯文), who has long been engaged in business between China and the United States, believes that “whether in terms of education, clean air and clean water, and food safety, China cannot meet the demands of its emerging middle class, who want more security in their lives. So they have taken matters into their own hands.”
As companies and individuals flock to transfer their assets overseas, the PoBC intervened in the foreign exchange market in order to hedge capital outflows and maintain the exchange rate, which caused China’s foreign exchange reserves to fall from their peak of nearly $4 trillion in June 2014 to less than $3 trillion in January 2017. The sharp drop in foreign exchange reserves has set off alarms bells in the Chinese government.
Foreign exchange reserves are seen in China as a financial buffer for turbulent times. Although Beijing’s foreign reserves dropping below $3 trillion has little real impact on the Chinese economy, Cheng Xiaonong (程晓农), a U.S.-based commentator, believes that it will cause the government a host of other problems. “Part of China’s economic security is the demand for foreign imports. If China loses the reserves it needs to import goods, oil and food prices will present a massive dilemma. Therefore, retention of these three trillions is something the Chinese government keeps a close watch on.”
The loss of foreign exchange reserves would also lead to an accelerated depreciation of the renminbi and an increase in the chances of triggering a financial crisis.
Xia Ming (夏明), a professor of political science at the City University of New York, believes that, “the Chinese government is very worried that if there are insufficient foreign exchange reserves to serve as a protective firewall, the national currency might come under attack, the economy may experience turbulence, and that this could even lead to regime collapse.”
The decline in China’s foreign exchange reserves has directed public attention to their real composition. According to the China Administration of Foreign Exchange, as of March 2018, China’s foreign exchange reserves were worth $3.11 trillion US dollars, while China’s balance of foreign debt was $1.84 trillion. This means that more than half of China’s foreign exchange reserves must be reserved for repaying foreign debts, and are not true assets.
At the same time, about half of China’s foreign exchange reserves exist in the form of US dollar bonds, which are not easily realized at any time. This kind of bad composition has added to public concerns about Chinese foreign reserves.
Along with the decline of foreign exchanges, there is also the risk of brain drain, said Hu Liren. “China has reached a period of great risk in terms of human resources, and many people have emigrated. There are still many [talented] people in the country, but their children have emigrated. The Chinese government does not want these thoughtful and intelligent people to leave, but it is difficult to change the current political status in China.”
The Chinese government’s moves to exercise stricter control over its foreign reserves have greatly slowed the momentum of capital loss. According to a report released this February by the Washington-based International Finance Association, the net outflow of China’s capital in 2017 was 60 billion US dollars, just a tenth of the $640 in outflows recorded in 2016.
Chinese financial scholar He Jiangbing (贺江兵) has applied the Mundellian impossible trinity, of Nobel Prize fame, to explain China’s foreign exchange controls:
“Among the three ‘impossibles,’ the first is the independence of monetary policy, the second is the relative stability of the currency exchange rate, and the third is the free flow of capital. Of these, you can only choose two.”
In other words, China has no choice but to impose strong controls on foreign exchange if it wants to maintain independent monetary policy and a relatively stable currency exchange rate.
This kind of foreign exchange control is useful for settling financial balances, as well as keeping the exchange rate and domestic prices stable. But at the same time, the burden it places on some classes is considerable. “Who is to bear the consequences?,” said a rather emotional Ms. Zhang. “I feel it’s us members of the middle class who are being hit hardest by these strict foreign exchange controls.”
Foreign exchange control not only puts unreasonable pressures on enterprises and citizens: the Chinese government’s restrictions on foreign companies remitting profits to their parent firms have done tremendous damage to the country’s credit.
Jacob Parker, vice president and head of China Operations at the US-China Business Council, said last year that as the United States lowered its corporate tax rates, some members of the Council expressed their desire to quickly bring back the profits they received in China, so as to minimize the risk of capital controls.
The serious loss of foreign exchange reserves and the urgency of foreign exchange control reflect a tandem battle between the Chinese government and civil society being fought in the context of economic downturn and political totalitarianism. When the people lack trust in the government and want to avoid political and economic crisis, they vote with their feet. At the same time, the stubbornness of the political system manifests itself in high-pressure policies that grab civil liberties by the throat in order to maintain control.
Beijing’s foreign exchange controls give us but a glimpse of the reality in China, where political and economic pressures have been compounded by the U.S.-China trade war. Whispers of the “China collapse theory” are getting louder as the struggle between the Chinese state and the people heats up in different arenas and on different levels.
Signs of China (1), September 16, 2018.
Signs of China (2), September 22, 2018.
Signs of China (3), September 30, 2018.
Signs of China (4), October 8, 2018.
China Change, September 22, 2018
Unsettling news from China emerges every week in a constant flow — on social media, in reports, and from our own sources in the country. Not every new development is suited to a fully fleshed-out analysis, and as with so much in China, many reports and developments cannot be immediately confirmed or properly evaluated. Nevertheless, while each individual brush stroke may not be decisive, upon stepping back a fuller picture begins to emerge. China Change catalogues and contextualizes these items so as to keep a growing awareness of changes in China. — The Editors
Local Government Debt: Going Bankrupt, or Raising More?
On September 13, the General Offices of both the Chinese Communist Party and the State Council jointly published a document giving ‘guiding opinions’ on limiting the debt that state-owned enterprises can take on. One line that attracted particular note said: “Local Government Financing Vehicles [LGFVs] whose assets are severely insufficient to collateralize their debts and have lost the ability to repay should engage in bankruptcy and restructuring, or liquidation proceedings, according to the law; resolutely guard against ‘Too Big to Fail,’ resolutely guard against the accumulation of risk becoming systemic risk.”
LGFVs are entities established by local governments around China, including fixed asset investment companies, real estate and urban development companies, and urban asset management companies. They invest in municipal construction and infrastructure projects, and are a de facto form of municipal debt (from 1995 to 2009 municipalities in China were forbidden from issuing bonds).
In early 2009 the People’s Bank of China (PBoC) and the China Banking Regulatory Commission (CBRC) issued the policy that gives the regulatory framework for this behavior, which “supports qualified local governments to organize infrastructure financing vehicles, issue debt, medium-term notes, and other financing instruments, in order to expand complementary financing channels for central government investment projects.”
Beijing economist Hu Xingdou (胡星斗) told Radio Free Asia (RFA) that the scale of LGFV debt in China has probably reached 40 trillion yuan, and the bankruptcy of LGFVs will likely cause serious losses among a very large investor base. “In particular, much municipal debt has been funded by Wealth Management Products [WMPs] sold through banks, and many people hold these products in their portfolios. A lot of people may lose their life savings.”
Chinese internet users remarked that bankruptcies in LGFVs equate to a default on the debt, and that a lot of people are going to lose their money. Some estimated that the number impacted in the coming LGFV bankruptcy wave will far outstrip, by an order of magnitude, the recent losses in the peer to peer investment sector, which saw thousands of angry investors protest in cities across China.
Yet even as municipal debt vehicles face bankruptcy, on August 14 the Ministry of Finance put out a circular demanding the rapid expansion of local government infrastructure bonds, which led to a massive rush of issuance. These bonds are the major way local governments finance their infrastructure expenditures. According to Xinhua, as of mid-September, around 200 billion yuan of new debt had been issued, which added to the August new issuance of 428 billion, making total new debt issuance in just 1.5 months over 600 billion yuan.
Why is so much new debt being issued even as the central government is warning against systemic risk and demanding the municipalities unable to support their debt initiative LGFV bankruptcy proceedings? We profess to have no clue.
The Government Wants Chinese to Spend, Spend, and Spend More
On September 20, the CCP and the State Council published a circular providing “a number of opinions” on encouraging more consumer spending: make the public increase their expenditures on food, clothing, accommodations, travel, and more; increase the quality and expand the number of things they spend money on (cultural products, travel, sports, health, retirement spending, housekeeping, education, training, children); create new consumer products, make them spend more online, consume more customized products, and also spend money on ‘smart’ technologies, fashion, and other popular trends. Rural residents are encouraged to up their consumption too.
Any economy is driven by investments, exports, and domestic consumption — but with the extraordinary growth of China’s fixed asset investment being largely exhausted, and exports facing tariffs from the Trump White House, the government seems desperate to boost consumption, even though it has been promoting it for some time now.
Someone in Zhongnanhai is evidently working overtime on these new opinions and demands, which are falling down like snowflakes.
Affirming for the 1001st Time That China’s Judiciary Is the Party’s Judiciary
Lawyer Liu Xiaoyuan noted the following piece of news: that on September 12 the Party Group of the Henan Higher People’s Court issued four circulars expelling from office 48 judges in the court. The circular attributed the decision to the provincial Party’s Organization Department. Liu Xiaoyuan notes that whether required by the provincial Party apparatus or decided upon by the court, going about it this way is against Chinese law. According to the Chinese constitution and the Law of the People’s Republic of China on the Organization of the People’s Courts, court presidents are elected by People’s Congresses at the same level; deputy court presidents, presiding judges, deputy presiding judges, and judges must be appointed and dismissed by the Standing Committee of People’s Congresses at their same level.
Meanwhile on September 17, the Ministry of Justice held a meeting in Yunnan for the promotion of “Party Building Work” among lawyers. Minister of Justice Fu Zhenghua (傅政华) spoke at the convocation, demanding that “the Party must assume comprehensive leadership in lawyer work; implement total coverage of Party Organization and Party Work across the legal field before the end of this year; guarantee the three year goal of Party building having achieved total coverage, total conformity, and total leadership by 2020.”
Is China Moving Muslim Internees to Other Parts of China in the Face of International Outcry?
The Chinese edition of The Epoch Times, a Falun Gong-associated newspaper, recently reported the following: “An official source in China recently obtained information from an associate in the police that over the last few days Uighurs in internment camps in Xinjiang have been distributed to different areas around the country. This work is being conducted with a high level of secrecy, and the travel routes used are all under police and military control. The source told The Epoch Times that 1,500 people were sent to the area he is in, and the police involved were all made to sign confidentiality agreements. The source speculated that, because the government plans to spread the 1-2 millions of Uighurs detainees, they would be sent to different prisons and detention centers, and he expressed the fear that the Uighurs might be killed.”
This reminds us that, in mid-August, there were rumors that internees from Xinjiang were being sent to Jiuquan (酒泉), Wuwei (武威) in Gansu province and Delhi (德令哈) and Golmud (格尔木) in Qinghai. A screenshot of a WeChat conversation describes an unusually heavy presence of security forces at train stations, and the understanding was that Uighurs were being transported.
Uighurs: More Professors Sent to Internment Camps; One Literary Editor Jumped to His Death; Highest Ranking Uighur Cadre So Far Sacked for ‘Corruption’
At least four senior Uighur officials from Kashgar University in Xinjiang have been removed from their posts for “two-faced” activities [i.e. disloyal to the CCP, critical of Party policies, or showing sympathy to targeted ethnic groups]. They include President Erkin Omer, vice president Muhter Abdughopur, and professors Qurban Osman and Gulnar Obul; information about them has been scrubbed from the university’s website. Read more.
According to a report by RFA’s Uighur service: Professor Azat Sultan, former President of Xinjiang Normal University and former chairman of Xinjiang chapter of China Federation of Literary and Art Circles, has been arrested for being a ‘double faced person.’ His whereabouts are unknown.
RFA Uighur service also reported that Keyser Keyum, the editor-in-chief of Literary Translation magazine, jumped from the 8th floor of his office building. It is said that he had received a call from police that day about sending him to ‘re-education’ camp.
On September 21 Xinhua reported that the deputy director of the National Develop and Reform Commission and director of the National Energy Administration, Nur Bekri, was suspected of severe violations of Party discipline and is being investigated by the Central Commission for Discipline Inspection. Hu Ping, a U.S.-based dissident, expressed horror at the news: “Nur Bekri was the chairman of the Xinjiang Uighur Autonomous Region in 2009 during the July 5 incident. In Xinjiang, the only other Uighur to be secretary of the region’s Party Committee was Saifuddin Azizi, and subsequently all Party Secretaries were Han, and the highest ranking Uighurs were only chairmen of the region [not chairmen of the Party Committee of the region]. And now, Bekri himself has been toppled. From this it can be seen how serious the situation is in Xinjiang, and how horrific the plight of Uighurs in China.”
Hu Ping noted that “according to Bekri’s official curriculum vitae, he received a Han education since he was a child and joined the Party in his early 20s. Following the July 5 incident he was promoted to the Central Committee during the 18th Party Congress, but didn’t remain in the Central Committee during the 19th Party Congress, nor become a deputy in the 13th National People’s Congress. It’s clear therefore that he had not been trusted by the Party center for some years already.”
On the second day of the riots in Xinjiang in July 2009, Bekri went on television to criticize Uighurbiz.net, a Chinese-language website run by Professor Ilham Tohti and his students, accusing it of “inciting violence and spreading rumors.” In March 2014 during the ‘Two Meetings’ in Beijing, Bekri told a press conference that the evidence showing that Ilham—arrested in January of 2014—had engaged in splittist activities was conclusive and unquestionable.
Ilham Tohti was sentenced to life imprisonment in 2014 and is currently being held in the Xinjiang No. 1 Prison. There has been almost no word about Ilham circumstances for the last two years, and many now worry about his health.
Moving Ordinary Residents out of Heart of Beijing
A social media post recently noted that following the expulsion of residents and demolition of buildings along Fuyou Street (府右街, the street along the west side of Zhongnanhai) and Xihuangcheng street (西皇城根, adjacent to Fuyou Street), a similar operation on the east side of Zhongnanhai has taken place, expelling residents along Nanchang and Beichang streets (南长街和北长街). The eviction and demolition notices stipulate that state leaders who live on these streets are not the targets of eviction. The post also said: “In the future, Nanchang street, Beichang street, and Fuyou street have all been closed off for regular traffic. According to the plan, in the next one to two years there will be a gradual eviction and demolition of residences on both sides on Jingshan (景山公园), the east of the Forbidden City, along Nanchizi and Beichizi streets (南池子和北池子), around Beihai park (北海公园), and around Shichahai (什刹海), in order to expand the living space for central Party leaders.” The elementary school on Beichang street, as well as Beijing 161 Middle School not far from Tiananmen, will both be relocated and incorporated into other schools.
We drew a rough outline of the area affected by the project based on the social media post:
Twitter User Detained for 10 Days for “Attacking Leaders of the Party and Country”
On September 11, a 42-year old Twitter user in Beijing, Quan Shixin (全世欣), went to the Haidian Public Security Bureau to request permission to demonstrate, and was administratively detained. He was released on September 21. The notice of administrative detention given to her said: “Quan Shixin used internet circumvention methods to attack the Party and state leaders on Twitter, the circumstances being severe. Thus she was administratively detained for 10 days.”
No Foreign Programs in Prime Time, and Foreigners Not Allowed in Key Positions on Chinese TV
On September 20, the National Radio and Television Administration published a draft version (for public comment) of a set of regulations regarding non-Chinese citizen involvement in television, broadcasting, and shows. The regulations apply to those from Hong Kong, Macau, Taiwan, and the rest of the world. The basic content is as follows: without the approval of the NRTA, TV outlets may not broadcast overseas programs from 7:00 p.m. to 10:00 p.m.; television stations may not spend more than 30% of their daily broadcast time on foreign films, shows, cartoons, documentaries, or other programs; the screenwriter and director of a program cannot both be foreign persons; male and female lead roles cannot both be played by foreigners; television and film producers who employ foreigners as creative staff must register the contract with the NRTA within five days of its signing.
Foreign television programs are popular in China, and it appears rules of this nature are meant to curb the availability of imported programs and the enthusiasm for them.
When a band in China named Fangu (反骨) [Rebels] applied for a permit to perform in Suzhou and Shanghai, the authorities told them to change their name before they could be approved. The band announced on social media that “due to force majeure, the band has temporarily changed its name to zhenggu (正骨) [Bone Correction], and we ask for your understanding.”
The Berlin Schaubuehne theatrical troupe’s performance of Henrik Ibsen’s An Enemy of the People has received a warm welcome in Chinese drama circles, but after three performances in Beijing the original plan to put on another two performances in Nanjing were cancelled. The authorities said that this was due to “technical reasons,” but is it possible that the drama’s storyline and theme felt a little too close to home for the Chinese authorities?
On September 15, the city of Jinan, Shandong Province, held a Rocket Music Festival (火箭音乐节); at one point during the event, when the audience felt particularly moved by the music, they began swaying their bodies together (as often happens at music festivals). At that moment, a police officer dashed onto the stage, stood at the microphone, stopped the music, and delivered a stern warning about public safety. “If you don’t cooperate, we’ll have to stop this performance [this elicited loud laughter]. Everything is subordinate to safety! If everyone is like you just were, then it absolutely cannot proceed. Everyone knows that our country is currently engaged in a special struggle in Sweeping the Black and Eliminating Evil… I’m watching everyone’s behavior from the stage. If there is danger, the performance could be stopped at any moment.”
‘Totalitarian’ Is the Word
Stein Ringen, Professor of Political Economy at King’s College in London, wrote a letter to fellow China analysts, asking that “we set our work straight in language.” “The People’s Republic of China is a totalitarian state,” he wrote. “Of its own kind, to be sure, hence neo-totalitarian, but totalitarian it is. No clarity of analysis is possible without clarity of language. The PRC is not ‘an authoritarian system,’ it is ‘a totalitarian state.’”
At China Change, we began to use the term “totalitarian,” “neo-totalitarian” and “market-totalitarian” in as early as 2013.
Signs of China (1), China Change, September 16, 2018.
Throughout the economic downturn China has kept huge numbers of people employed by starting massive infrastructure projects. They’ve built hundreds of miles of high-speed rail, started construction on new subway lines, and have worked on improving the freeway system. It seems China has all the infrastructure it could ever need, maybe even more than it will need for a while.
However, there are three areas that seem decades behind where they should be for a superpower, and we’ll be looking at them over the next few days.
Banks- The bank is my least favorite place in China. It is the pinnacle of Chinese style bureaucracy, with piles of pointless paperwork and regulations that are impossible to understand.
A few examples:
Paper work – When my friend Kyle went to close his bank account in Pingxiang (near Longzhou) he brought his passport and bank book (an ancient banking method in itself), but he forgot his ATM card. The bank refused to close the account without the card. Pingxiang was an hour away, so he decided to draw all but the last few RMB and leave the account open, which it still may be to this day.
When it was time to close my account at that branch I had to sign 8 papers and enter my PIN 5 times; I lost track of the number of stamps that were used.
Regulations – The next year in Yizhou I managed to save up a decent amount of money (for rural China), but I was moving to Chengdu. My account was at the Construction Bank of China, which is one of the major banks. My friend Mary though told me that I had to withdraw all the money and take it with me, and then open a new account there. It turned out I would have had to pay a fee any time I took money out of the account from another province.
Like most things in China, the banks are only just barely connected. Even at the largest banks, the branches act more like separate institutions.
At the moment this banking system is causing headaches for the National gov’t as they try to reign in housing prices by limiting the number of mortgages a person can hold. Individual branches rarely communicate between cities, let alone between different banks; which makes it next to impossible to track loans. I also can’t imagine trying to run a business through Chinese banks, if personal banking has caused me so many problems.
Part Two looking at how this trend affects health care.
Part Three looking at the trends that limit effective govt.