• One statistic summarizes the situation: in Q3, there was $460.6 billion of net capital outflow. No economy can survive outflows of that size. The Chinese economy has never made sense, but confidence held it together. Now, the confidence is gone.

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• There are indications that China’s economic growth rate is, in reality, close to zero. Take the most reliable indicator of Chinese economic activity, the consumption of electricity.

• China’s Communist Party has been closing off the Chinese market to foreigners, recombining large state enterprises back into formal monopolies, increasing state ownership of enterprises, and shoveling more state subsidies to favored market participants.

• Just about everyone correctly agrees that a new round of structural economic reform could restart growth.

“On conservative growth projections, China’s economy could well be bigger than the sum of all the G7 economies in real terms within the next decade,” writes Peter Drysdale, the editor of the popular East Asia Forum website.

Not everyone is as optimistic as Drysdale, but the general view is that China will work through a transitory period and enter a new phase of growth powered by consumer spending.

Are China’s economic problems merely temporary — a year or two at most — as the majority view suggests?

Perhaps, but there are also reasons to believe the country will have to endure prolonged hardship, either two or so decades of recession and stagnation or, more probably, a sharp 1930s-style crash followed by years of deep contraction.

Today, the Chinese economy is in far worse shape than most economists and other analysts think. China’s economy could not have been growing at the 6.9% pace reported by Beijing’s National Bureau of Statistics (NBS) for the third calendar quarter of this year or at the 7.0% rate claimed for each of the first two quarters.

It is more likely to have been the 4% that Willem Buiter, Citigroup’s chief economist, recently suggested, and perhaps the 2.2% that people in Beijing were privately talking about a few months ago. And maybe it is even less than that.

There are, after all, indications that China’s economic growth is, in reality, close to zero. Take the most reliable indicator of Chinese economic activity, the consumption of electricity. For the first nine months of the year, electricity consumption increased by only 0.8% according to China’s National Energy Administration.

Defenders of NBS’s gross domestic product (GDP) numbers argue the economy has shifted from energy-intensive manufacturing to services, so electricity is no longer indicative of economic trends. That, however, sounds like an excuse.

In any event, previous criticisms of the electricity numbers have been exaggerated, and Premier Li Keqiang, now China’s economic czar, said in 2007 that official economic growth statistics were “man-made” — unreliable — and that he looked to electricity figures when he wanted to know what was really going on.

Yet even if electricity is no longer as indicative as it once was, there are other statistics confirming the sharp deterioration of the economy. For instance, imports — a sign of both manufacturing and consumption trends — fell 15.7% in the first ten months of this year in dollar terms. October, when they dropped a worse-than-expected 18.8%, was the 12^th-straight month imports have fallen, and that equals the record from 2009.

Another disturbing sign is found in price data. In Q3, nominal GDP growth of 6.2% was less than the officially reported real growth of 6.9%, indicating deflation.

Deflation is never a good sign, and China looks as if it is now caught in the trap of falling prices. That means a 1930-style adjustment — a crash, in common parlance — is increasingly possible. And maybe even likely.

The problem for China’s leaders is that nothing they have been doing in the past year to stimulate growth has been working. Six reductions in benchmark interest rates since last November and five reductions of the bank reserve-requirement ratio since February, for instance, have had no noticeable effect.

This monetary stimulus is unproductive because there is a lack of demand for money. Banks do not want to lend, and potential borrowers do not want to borrow. Central government technocrats can create money as if there is no tomorrow — M2, the broad gauge of money supply, was up 13.5% in October — but few see a need to invest available cash. So creating money this year has not resulted in growth.

At the same time, two other government tactics have come a cropper. First, the reckless promotion of stock price rises, beginning during the fall of last year, was intended to create a wealth effect. The campaign, however, led to the dramatic collapse in equity prices in June. Beijing, incredibly, had not learned its lesson, and in recent months engaged in another round of government cheerleading. Chinese officials, however, should realize that a rise in prices without an improvement in fundamentals can only lead to another horrible bust.

Second, the still-inexplicable devaluation of the renminbi beginning August 11 has not helped either. The move caused a global run on the currency, and Beijing still has not changed sentiment even if it has, through extraordinary means, temporarily stabilized the situation.

Just about everyone correctly agrees that a new round of structural economic reform could restart growth, but such change has become exceedingly unlikely because:

• powerful vested interests are blocking it;
• there is now a perception in Beijing that reform will reduce growth at first and China cannot afford any dip;
• President Xi Jinping’s idea of change is regressive.

Since coming to power as China’s leader, Xi has been reversing Deng Xiaoping’s policy of “reform and opening up.” He has, for instance, been closing off the Chinese market to foreigners, recombining already large state enterprises back into formal monopolies, increasing state ownership of enterprises, and shoveling more state subsidies to favored market participants.

Xi has also strangled his country’s financial markets in order to keep share prices high and currency values elevated. For example, this summer his government restricted stock-index futures because it considered these derivatives a source of downward pressure on stock prices, but the restrictions killed activity. China’s stock-index futures market, the world’s largest in mid-June when the slide began, was devastated, with transactions down 99% by September.

Even when Beijing has summoned the gumption to announce reforms, there has been more show than substance. For instance, late last month the People’s Bank of China, the central bank, announced it was eliminating the caps on deposit rates, but officials are now informally dictating to commercial banks the deposit rates they may offer.

Let us not be surprised by the end of liberalization in China. Xi Jinping’s signature initiative, encapsulated by the phrase “Chinese dream,” contemplates a strong state, and a strong state does not sit easy with the notion of market-oriented reform. Unfortunately for Xi, also the Communist Party’s general secretary, there are no solutions that are possible within the political framework he will not change.

Therefore, Xi’s government has fallen back on fiscal stimulus to create growth. Fiscal spending was up 36.1% in October, according to the Finance Ministry. This follows increases of 26.9% in September and 25.9% in August. In the first ten months of this year, fiscal spending was up 18.1% while revenue rose only 7.7%.

No analyst is cheering the new spendathon. Just about everyone knows China does not need another “ghost city.” And everyone is concerned about the debt that has been created to fuel growth. McKinsey Global Institute puts the country’s debt-to-GDP ratio at a worrisome 282% at the end of June 2014, but the number is surely higher than that now, perhaps in the vicinity of 350% once all hidden obligations are counted and GDP is accurately assessed.

And even with this extraordinary spending, growth has been anemic — if there has been any growth at all. Beijing’s problem at the moment is that there is deep pessimism about the prospects for the economy. One statistic summarizes the situation: in Q3, there was $460.6 billion of net capital outflow, as documented by Bloomberg. No economy — not even one the size of China’s — can survive outflows of that size.

The Chinese economy has never made sense, but confidence held it together. Now, the confidence is gone, and Beijing does not know how to get it back. Therefore, money is gushing out of the country.

“Deep winter will continue,” said Liu Dongliang, a China Merchants Bank economist, to Hong Kong’s South China Morning Post. Chinese leaders, not willing to open up their political system so they can reform the economy, should expect the weather to remain cold a very long time.

Gordon G. Chang is the author of The Coming Collapse of China, a contributor to Forbes.com, and a Distinguished Senior Fellow at Gatestone Institute.

• Iran’s entire power structure and most of its civil society is centralized under the personal control of the Supreme Leader. In this way, Iran’s dictatorship is every bit as entrenched as North Korea’s, making the idea of traditional regime change a pipe dream.

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• The mullahs created a regime — an entrenched revolution — specifically designed to resist change or reform, adopting a unique theocratic structure that uses both Islamic ideology and brutal force to maintain absolute power.
• There is but one regime, and it has no interest in “reform.”
• The membership of every single one of the many official-sounding bureaucratic organs is personally approved by the Supreme Leader. Indeed, any individual, or coalition of individuals who might serve as a check on his absolute power is, in fact, completely beholden to Khamenei’s whims, making him the most complete and powerful dictator on the planet.
• Elections in this regime are not indicative of any form of “democracy”. Instead, they are merely a process of choosing among individuals vetted by the Supreme Leader. There are no factions based upon ideological differences, there is mere jockeying for position and the personal favor of the Supreme Leader.
• Western governments’ policy of providing concessions to the Iranian regime in order to empower “reformist” factions is based on a fantasy — a fantasy which the Iranian regime deliberately encourages in order to fool naïve foreign leaders into easing sanctions and turning a blind eye to the nuclear program. In reality, Western concessions are strengthening Khamenei — further reducing the possibility of change, and increasing the likelihood of outright war.

• Iran’s Supreme Leader and the senior cadre of the Islamic Revolutionary Guard Corps have been vocally critical of the nuclear deal. They fear further diplomatic and political rapprochement between the US and Iran, now that they have already achieved their objectives of the lifting of the four major rounds of the UN Security Council’s sanctions.

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• After the nuclear deal was implemented, polls showed that 63% of Iranians expected to see improvements in the economy and living standards within a year. But currently, in a new poll, 74% of Iranians said there had been no economic improvements in the past year.

• Western governments need to accept the harsh reality that the Islamic Republic of Iran remains a revolutionary regime. The IRGC has responsibility over all ballistic missile programs and research and development. The West also needs to internalize that all decisions over ballistic missiles and associated delivery systems, the pursuit of a nuclear weapons capability, export of the revolution, aggressive support of the Shi’a ascendancy in the Gulf and militant acts of inhumanity towards their own people are made by the deep state.

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• In short, the Iranian regime is much more Islamic than a Republic. The regime’s most reviled and inveterate enemies remain Israel and the United States.
• Those Iranians opposed to the existing order have been broken physically and psychologically by a combination of regime cruelty and lack of support from the world’s democracies.

• “She writes something but means something else.” — Tehran Islamic Prosecutor.The irony in all this is that Ekhtesari is not a political poet. In fact, she has written that those who try to use poetry for politics betray both.

• The sentencing was made easier thanks to a recent lecture by “Supreme Guide” Ayatollah Ali Khamenei, laying down the rules of what he believes “good Islamic poets” should observe when writing poetry.

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• The poet Sa’id Sultanpour was abducted on the day of his wedding and shot dead in a Tehran prison. Rahman Hatefi-Monfared had his veins cut and was left to bleed to death in the notorious Evin Prison.

• “I hope to see the day when no one is sent to jail in this land for writing poems.” — Mehdi Mussavi, convicted poet.

Does a seminar on reforming the meter and rhyme schemes of Persian poetry violate “Islamic values” and threaten the foundations of the Islamic Republic of Iran?

That is the view of the Islamic Court in Tehran, which last month sentenced two poets, Fateme Ekhtesari and Mehdi Mussavi, to nine and 11.5 years in prison respectively, plus 99 lashes of the cane for each in public.

One of the two, Mrs. Fateme Ekhtesari, was sentenced to 11.5 years for “undermining the security of the Islamic state” by composing and reciting in public a number of “poems full of ambiguity and capable of being read in deviant and dangerous ways.”

The Islamic Court in Tehran sentenced two poets, Fateme Ekhtesari (left) and Mehdi Mussavi (right), to nine and 11.5 years in prison respectively, plus 99 lashes. Ekhtesari was charged with reciting “poems full of ambiguity and capable of being read in deviant and dangerous ways.” Mussavi was charged with “insulting sacred values of the Islamicummah.”

Ekhtesari is a surrealist poet whose verse could, and indeed is intended to, be read in many different ways. One of her diwans (collections of verse), for example, is called “Crying on the Shoulder of An Egg”. Another comes under the title “A Feminist Discourse Before Baking Potatoes.”

Feminism is a strong theme with Ekhtesari, who insists that, as God created both men and women from the same “red mud” mentioned in the Koran, there is no reason to prevent the latter from enjoying any freedoms available to the former.

The Tehran Islamic Prosecutor, however, insisted that Ekhtesari’s “ambiguous poems” were meant to pass “dangerous political messages that could encourage people to distance themselves from the True Faith.”

“She writes something but means something else,” the prosecutor claimed. “Her trick is to avoid saying anything in a straightforward way, creating space for all manner of dangerous thinking.”

The prosecutor based part of his case on the claim that what matters in Islam is “zikr,” that is to say, a constant remembrance of God by repeating, if necessary in silence and to oneself, the formula “There is no God but Allah”. Those who abandon “zikr” for its opposite — which is “fikr“, that is to say, thinking — move away from the Path of Faith.

The irony in all this is that Ekhtesari is not a political poet. In fact, she has written that those who try to use poetry to advance political ideals betray both.

As editor of the monthly literary magazine Only One Tomorrow, Ekhtesari offered space to writers and poets across the ideological spectrum, including some Khomeinists. Her magazine was shut down soon after Hassan Rouhani became president.

However, as a poet, Ekhtesari cannot but be affected by the ambient social and political order in her homeland. She cannot turn her face the other way when she sees ugliness, oppression and terror — themes that force their way into some of her poems.

Ekhtesari is also an original theoretician of poetic modes. Her collection of essays entitled “Linguistic Tricks in Postmodern Sonnet” is both intriguing and instructive.

Ekhtesari’s fellow convict-cum-poet is Mehdi Mussavi, who received a six-year sentence. Mussavi is the founder and principal animator of a poetry workshop in Tehran where Ekhtesari has often spoken and recited her poems. The workshop is supposedly dedicated to developing a new form that Mussavi calls “postmodern ghazal.” The classic form of Persian sonnet,ghazal, has been the subject of numerous attempts at modernization, notably by Simin Behbahani, one of Iran’s greatest contemporary poetesses.

Like Behbahani, Mussavi argues that, having experimented with modern forms, including European-style prose-poetry, for almost a century, Persian poets need to return to traditional forms, albeit with changes to reflect modern realities.

Mussavi rejects the argument of the older generation poets such as Ahmad Shamlou, who claimed that the traditional ghazal is so beholden to the musicality of its meter and rhyme schemes that it cannot relay any meaning in a powerful way.

According to Mussavi, once the Persian poet has learned to play by the traditional rules, he could invent virtually countless meters and rhymes capable of expressing any sentiment.

Literary opponents of Mussavi’s theories, especially on the left, argue that he, like Behbahani and other reformers of the ghazal before them, suffers from a sense of insecurity in a changing world where the Iran they knew is being remolded into something repulsive in the name of Islam.

The Islamic Court, however, charged Mussavi with propagating “immoral images” in his poetry and thus “insulting sacred values of the Islamic ummah.”

Equally painful is the Islamic Court’s decision to impose a blanket ban on the publication and recital of any poems by Ekhtesari and Mussavi. Under an edict issued by the Islamic Guidance Ministry in 2003, people like Ekhtesari and Mussavi, who are found guilty of “insulting Islam” and thus put on the official index, become “non-persons” — even their names and pictures are banned.

Both Ekhtesari and Mussavi had spent several months in prison two years ago, but were released after the Islamic Prosecutor Ayatollah Ra’isi failed to prove any political crime.

That is why this time, the prosecutor focused on a claim that the poets had attacked “the sacred tenets of the faith”.

The sentencing was made easier thanks to a recent lecture by “Supreme Guide” Ayatollah Ali Khamenei laying down the rules of what he believes “good Islamic poets” should observe when writing poetry.

However, as exiled poet Yadallah Roya’i notes, one could write an advertising text or a police report on demand, but not poetry. “Even the poet cannot order himself to write poetry,” Roya’i noted.” The poet is like a tree, shedding its leaves and flowers so that there is room for future leaves and flowers.”

Iran is one of the few countries in the world where poetry has always been regarded as the highest form of literary creation. In Iranian cities, streets and parks were more often named after poets than conquerors or empire-builders or, until the mullahs seized power, Islamic saints and/or theologians. If an Iranian home has at least one book, it is likely to be a collection of poems.

And yet, with the seizure of power by mullahs in 1979, Iran has experienced one of the most dangerous phases in its long history, as far as poets — and intellectuals in general — are concerned.

Another irony is that both the founder of the regime, the late Ayatollah Ruhollah Khomeini, and his successor as “Supreme Guide” Ali Khamenei, cast themselves as amateur poets. Khomeini banned publication of his own divans while he was alive, believing that appearing as a poet might soften the dour persona he was building as leader of a revolution that could execute 4000 people on a weekend.

Since his death, however, hundreds of his poems, most of them traditional-style sonnets (ghazals) have been published by the foundation bearing his name. Ali Khamenei does not publish his poems, but organizes private readings with a few dozen “appreciators” once or twice a year and is reportedly “in seventh heaven” when his entourage quote one of his verses.

Ekhtesari and Mussavi have been sent to jail, not killed. Other poets have not been so lucky.

Hashem Shaabani was hanged on the eve of President Rouhani’s visit to Ahvaz in 2014. Shaabani was not the first Iranian poet to be murdered by the mullahs. The left-wing poet Sa’id Sultanpour was abducted on the day of his wedding on Khomeini’s orders, and shot dead in a Tehran prison. Rahman Hatefi-Monfared, writing under the pen-name of Heydar Mehregan, had his veins cut and was left to bleed to death in the notorious Evin Prison. Under President Hashemi Rafsanjani, a plan to kill a busload of Iranian poets on their way to a festival in Armenia failed at the last minute. Nevertheless, Rafsanjani succeeded in eliminating more than a dozen writers and poets. The worst spate of killings happened under President Khatami, when more than 80 intellectuals, including the poets Mohammad Mokhtari and Mohammad-Ja’far Pouyandeh, were murdered by the Islamic regime’s security agents.

Let’s give the final word to Mussavi: ” I hope to see the day when no one is sent to jail in this land for writing poems.” Inshallah!