Reference Material: The Unpredictable Risks of Investing in China

Famous economist Professor Chang Ching-hsi arrived in Denver, Colorado on August 13th after being invited to speak in the "A Taiwanese Point of View on Global Trends and Chinese Economy" seminar held at the Zijin Restaurant. Roughly 100 Chinese people living abroad attended the seminar to discuss the different directions the economy is taking on the two shores.

In his speech, Professor Chang Ching-hsi referenced economic theory and relevant data to analyze the direction of China's economy. He also advised Taiwanese businesses to exercise caution when investing in China.

Regarding China's reported annual GDP growth of 7-8% over the past few years, Professor Chang used an array of facts to question the credibility of this statistic. Professor Chang believes that it is not only impossible for China to maintain a constant GDP growth rate of 7-8%, but that it is also impossible for the average overall growth rate in recent years to reach this figure. The figure may easily have been created to aid the popular notion of "stability before everything." Yet why would the Communist Party "pad" the growth rate statistic so greatly, yet not do so with other figures? To this question, Professor Chang pointed out that the Communist politicians seemed to think that the strongest evidence for justifying the Communist Government is economic expansion, which is the idea of "expansion is the foremost directive." A GDP growth rate of 7-8% is a figure that has always been hoped for, but has so far been unachievable in other countries around the world.

Looking at the growing unemployment rate in China, the ever growing disparity between the rich and poor, the irregular and unconventional features of the Chinese economy, the experiences of Taiwanese investors in China, as well as other related economic data, Professor Chang predicted that the Chinese Economy will collapse in the next five years. Professor Chang also advised Taiwanese investors to carefully forecast the risks associated with their investments.

After the seminar concluded, one of the attendants of the seminar, Professor Guo, strongly advised the relevant departments in Taiwan's Government to assume the responsibility of distributing the video "The True Story of the Tiananmen Self Immolation" to Taiwanese citizens so as to let people be fully aware of the dangers and risks associated with their investments in China. Professor Guo thinks that this is a responsibility which the Taiwanese Government must not shirk, just as the United States police would not shirk the responsibility of warning their people about the dangers of reckless driving.