This is CBSI in the world. I'm John Batcher. The Chinese economy, the most recent results

show that the manufacturing revival is not happening. The PMI is under 50%. Before that

we had Evergrande and Countryguard and the two big developers in failure. We also had

ceremonially the departure of Lika Chang. He died suddenly of a heart attack we're told

in Shanghai. A man who was associated with reform once upon a time before Xi Jinping, a man

associated with surveillance and closing China to outside interests. A man who is rival

for Lika Chang, he survives. So therefore we turn to this Chinese economy, the miracle

of the early part of this century. With Joseph Sternberg, he's in London. He writes

political economics. He was many years in China and Hong Kong before the fall of that fabled

city under the boot of the surveillance state of the mainland. Joe a very good evening to

the Chinese property meltdowns, the disappointing manufacturing numbers for several quarters

now and no prospect of turnaround. All that can be described as symptoms of a financial

crisis. That points to banks. What financial crisis? What about the banks? The people's

bank of China principally any time at once. What's in trouble? Good evening to you, Joe.

Hey, John. I mean, this is the great speculation about the Chinese economy right now is whether

the collapse of the property market, which is underway, is going to trigger a financial

crisis of some sort. What I think a lot of people, particularly in the US or Europe,

have in mind when they talk about this, is something like what happened to Lehman Brothers

or Bear Sterns back in 2008, which is the collapse in property values, forces of very rapid

mass write down of loan assets in the financial system that were based on that property

as collateral and then you're off to the races. I mean, that triggers all kinds of

a seize up in the banking system, which makes it impossible for people to get the liquidity that

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