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Beijing Olympics - 7 Things You don't know about China

July 31, 2008

News Release Wire
East Providence, RI 02914
July 29 2008

Soon the coverage of the Beijing Olympics will overwhelm the media.
There will be never ending stories about China's spectacular growth
and forecasts of what that means in the future. But there is another
story, a darker story. There are things about China that are not well
known and every economic forecast at some point in time is wrong.

1. The Chinese stock market has lost over 50% in value in less than 8 months.

2. In Shenzhen, a city that borders Hong Kong, the average price of
property dropped 30% this year in 3 months. Sales of apartments in
Shanghai are off 50% this year. Housing prices are also vulnerable in
Beijing, Shanghai, Hangzhou, Ningbo and Haikou on the coast, and
Wuhan, Nanning, Xi'an, Lanzhou and Urumqi in the interior. Can you
say subprime in Chinese?

3. The number of shoe factories in the province of Guangdong outside
of Hong Kong, the so called work shop of the world, has dropped 40%
since 2002. Over 10,000 factories have closed since the introduction
of a new labor law at the beginning of the year.

4. Of the top 20 most polluted cities in the world, 16 are located in China.

5. According to the Chinese Ministry of Public Security there were
over 74,000 protests in 2004 involving more than 3.7m people; up from
10,000 in 1994 and 58,000 in 2003. The number is increase
geometrically. Although the protests in Tibet were widely covered, a
violent protest in June brought 30,000 residents on to the streets of
Wengan, in Guizhou province.

6. China is experiencing the worst power shortage in at least four
years. The miss match between soaring coal prices and government-set
electricity rates have resulted in the closure of over 58 power
stations. Almost half of China's provinces have started to ration electricity.

7. In 2006 a report by Earnst & Young estimated that the Chinese
financial system had bad debts of close to a trillion dollars. No
doubt the number is much higher as a result of the real estate and
stock market crash.

I am William Gamble, JD, LLM, Ex MBA, KSC, a consultant specializing
in emerging markets. I have been quoted or interviewed by ABC, CNN
Asia, Bloomberg, Fox, CNBC, NPR and other television and radio
stations around the world. I have published 24 letters in Financial
Times and articles in Foreign Affairs, and Harvard International
Review. I have been quoted USA TODAY, The Far Eastern Economic
Review, The International Herald Tribune, The South China Morning
Post, Sankei Shimbun. I have written two books Investing in China and
Freedom: America's Competitive Advantage in the Global Market. In the
past year I have spoken to CFA societies in 10 countries and 9 US
cities as well as other conferences all over the world.

William Gamble, Author: Freedom: America's Competitive Advantage in
the Global Market

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