Li Zuojun, an economist at the Development Research Center of the State Council, recently delivered a speech on China’s economy, apparently at an internal meeting. According to reports, he stated that an economic crisis in China is on the way, and will possibly commence in July or August of 2013. A key feature of the crisis will be that small to medium sized businesses, banks, and local governments will declare bankruptcy, causing social conflicts to intensify even further. Li based his prediction on four reasons: the first is economic: the burst of the bubble in the housing market and local financial crisis; the second is international: the withdrawal of foreign investment from China; the third is political: the change in the control of the Communist Party; the fourth is the “triple witching”: the short, intermediate, and long term economic cycles all bottoming out at the same time.
Source: ifeng.com, August 24, 2012