China's 'black box' causing HUGE economic problems: 'The lack of transparency is a serious threat'
The economic crisis in China 'is one of faith of the Chinese investor' in their own system of government, according to a specialist
GB News
The economic crisis in China "is one of faith of the Chinese investor" in their own system of government, according to a specialist who warns that the country is threatened by its "lack of transparency".
Brian Kennedy - chairman of the Committee on the Present Danger: China - said the economic downturn across the country is caused by a scarcity of accounting standards, dubbed a "black box" where the country does not have financial rules to abide by.
Speaking to GB News, Kennedy explained that China's "lack of transparency" is a serious threat to its own country.
"In America and Great Britain we have all sorts of laws that we are companies have to follow, disclosing all sorts of accounting requirements so that people actually know what's going on financially within these publicly traded companies," he said.
WATCH NOW: China specialist explains how China's 'lack of transparency' is serious threat
"In Communist China, it's a black box. There are no accounting standards that anyone has to conform to.
"So anytime there's any kind of a downturn or people wonder about whether or not their money is safe invested in communist China, there's nothing to prove to them that their money isn't simply being stolen.
"And the collapse of their real estate market is partly based on this idea that people don't know whether the money they've invested in these real estate companies is actually there or not, whether the real estate even exists.
It comes as investors claim China's share of the global economy is declining and the turn could "reorder the world".
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Expert Ruchir Sharma said the country's decades-long run of growth has come to an end as its share of world GDP is set to shrink by 1.4 per cent over two years.
In nominal dollar terms, which Sharma argues is the most accurate measure of an economy's relative strength, China's share began decreasing in 2022 following a spate of strict Covid measures.
Kennedy said the downturn is really a "lack of competence".
He added: "So the crisis in Communist China right now is one of faith of the Chinese investor in their own system of government.
Expert Ruchir Sharma said the country's decades-long run of growth has come to an end as its share of world GDP is set to shrink by 1.4 per cent over two years
Reuters
"And so this downturn is really a lack of a lack of competence that the Chinese consumer is actually part of a a real economic system.
"And I think that's a real threat to to Communist China, their lack of transparency.
"They talk about being you know a market based economy or a market based with social socialist characteristic.
"But in reality, as I say, it's a black box and that that black box right now is creating huge economic problems."