Re:Baoshang collapse threatens China's economy, may trigger ...
by ethbro on Sunday June 30, 2019 @04:57PM
(#20320476)
Garbage in, garbage out.
While Enrons happen, a fundamental aspect of Western-style accounting is legally-mandated transparency (at least to someone, somewhere).
Without a standards-based legal system, what's to stop anyone from cooking the books?
And if every ledger is a lie to some degree, then aggregating those just produces bigger lies. Until you're finally left with the "unable to calculate [...] with any level of certainty" answers to a host of important economic questions.
Sounds familiar from the 1980s...
I don't think that anybody, or even the head of Chinese central bank himself knows how Chinese economy works, except for the fact that it does.
When I lived in Canada, I shared apartment with a power couple from Beijing: a central bank worker, and a former Huawei senior engineer (though both were from Shaanxi originally.) A girl who worked in the central bank for her entire career were telling that just understanding everyday workings of the system was beyond PBOCs most senior analysts, giving the example of how PBOC took years to trace missing billions of rural lending cooperatives that went bust mid nineties, or how the entire PBOC analysis and statistics wing was unable to calculate country's real current account changes with any level of certainty.