Another week of escalating trade war, and further signs that China needs the West more than the West needs China. Wobbly currency and stock trends continued, and the “National Team,” for sure, has been burning money to keep numbers in psychologically acceptable territory. The RMB ended the week at around 6.85 to the USD, it says here, and the consensus is that they have to keep it above 7 to maintain a sense of calm among the Chinese investment masses.
The economy really is beginning to feel the effects of various trends, of which the US-China trade standoff is only one, and there were reports that Those in Command are reconsidering the Belt-Road cash splurge. Auto sales were also down in July for the second month running. Property is the core indicator to watch in terms of whither the Chinese economy, but autos is number two.
There were various things this week flying around the walled internet space that is WeChat that we saw which related to middle-class discomfort with overall developments. And that remains the key issue to watch if the economy really does move onto the down-ramp.
But twinned with that was a fascinating incident relating to the crisis-riddled P2P industry – online investment players who took the money and ran, leaving many ordinary people in the lurch. Apparently 10,000 victims of this P2P situation planned to converge on Beijing to call for redress, but they were headed off at the pass by the people’s public security bureau. Travelers with an agenda were removed from trains on their way to the capital. How did they know who to watch for? WeChat. So does the monopoly on interpersonal communication enjoyed by the authorities, by WeChat, mean there is no way for such an event to be organized in the future? And how does that play out in the event of an off-ramp economic experience at some point in that possibly dystopian future? Word of mouth? What interesting times.