China’s Economic and Stock Market Crash Complicates Its Peaceful Rise

This is how it is always happened the past. 



This is the last trick of the people in power(Communist party of China)

Obama or the next US president will use the same playbook.

Once economy goes down and Chinese citizens get fed up and ask for political/economic change Communist party of China will blame someone else (US, Japan,Vietnam, Phillipines,India) and go to war.
This will deflect attention from falling stock markets and falling economy.


The US/Russia will also take a same course.

Late 2016- early 2017 is probably when the war cycles begin(That is when the global Economy goes into a tail spin).

http://www.conflict-news.com/chinas-crash-complicates-its-peaceful-rise/



Over the last month the Chinese stock market has seen massive day-on-day falls representing a loss of billions of dollars of value, and the rapid deflation of certain sectors of its economy. This combined with a number of other factors could give rise to a dynamic where the country may need to become more belligerent in order to maintain internal order.

The crash of China’s stock market is just one of several factors which belie serious concerns for the country’s future economic growth. While the market itself does not have strong links with China’s ‘real economy’, there is mounting evidence that China is slowing down at a faster rate than its leadership can control. Among the most damning evidence of this is a recent index showing manufacturing at its lowest levels since the Global Financial Crisis. Furthermore, recent reports from China’s provinces show massive levels of debt, slowing growth and a significant over-reliance on the so-called ‘shadow banking’ sector.

Barring a dramatic collapse of the Chinese economy, which at this stage still seems improbable, it is likely that Chinese growth will continue to contract. The country’s government is already preparing for this, with a the promotion of the ‘New Normal’ (新常态) – a transition to a lower-growth, consumption-based economy. While this rebranding effort might appease some, it shows just how concerned the Chinese Communist Party (CCP) is with the perceived failure of its economic mandate.

Fundamental to the modern CCP is the concept of the Harmonious Society ( 和谐社会), an idea which enshrines stability as the core goal of the government. Effectively every action the CCP takes, from its internet censorship to its aggressive market interventions, is undertaken with this in mind. Should large numbers of Chinese people lose their manufacturing jobs, or their savings through a property/stock market crash, this would cause massive internal instability.


Within this dynamic, alongside an internal crackdown, the Chinese government would likely eye moves which could unite the country through nationalism. Among the most alarming of these are possible aggressive moves in the South China Sea, and the Diaoyu Islands. These could involve provoking neighbors like Japan and Vietnam into a small-scale skirmish to distract from internal unrest. Other less likely locations for such posturing would be the Indian border in the Kashmir region, an area home to recent Sino/Indian disputes, and the Chinese border with Myanmar, scene of a deadly cross border incident earlier this year.

The goal of any such provocations would not be to conquer territory or indeed even to gain international diplomatic capital, but rather simply to bolster internal stability against a foreign threat. Despite this, there is a very clear escalation risk that comes with such moves. Accordingly, the Chinese economy would have to be in a significantly poorer state than it is now, before the CCP would be willing to risk such a step.


Go for appeasement ?

Nevertheless, the risks of Chinese “aggression” in key areas will continue to rise for as long as the Chinese economy continues to sink. Surrounding nations would do well to better understand Chinese actions, and either beef up defenses in potential flashpoints, or indeed play for an appeasement strategy which accommodates possible aggression from China that doesn’t pose a real threat to their core territories.

China has long stated that its economic rise was a peaceful one, but with its economy no longer rising so fast, will its promise of peace also disappear?