(Above – Condos in middle of China sit empty)
After years of pointing out the failing China economy, the rest of the media is finally catching up.
Before COVID I reported on the slowing China economy.
After COVID I reported that if China released COVID intentionally, it may have been to hurt the US and world’s economies because China’s CCP led economy was failing.
It looks like finally the world is catching on. The numbers coming out of China are bogus. The CCP led economy is failing.
The Business Insider reports today.
For the past three decades, China has been on the upswing of a supercycle that saw an almost uninterrupted expansion of the country’s capacity to manufacture, appetite to consume, and ability to project power across the world economy. The Chinese Communist Party relentlessly pursued economic development over all else, even when that single-mindedness pushed the party to make debilitating policy mistakes — creating a massive bubble in the property market, saddling provinces with loads of debt, and failing to transition away from an overreliance on investment. There was no time to stop for corrections while China’s mind was on money alone.
This era of expansion was not only a boon for Beijing, it also helped fuel global demand. Countries relied on China’s hunger for speedy modernization and industrial might to supercharge their own development. Even American companies saw China as the next great global market — and made bets accordingly.
They lost those bets.
President Xi Jinping has shifted the CCP’s raison d’être to national security over the economy. Getting rich isn’t China’s big project anymore; the project is power. As a result, both the government’s priorities and behavior have changed. In the past, whenever it seemed like a recession was on the horizon, the CCP came to rescue. There’s no hefty stimulus coming this time. Nor will the explosive growth that experts once expected from China return. Beijing’s relationship with the outside world is no longer guided by the principles of economic rationality, but rather its yearning for political power.
“This isn’t about the economy anymore, it’s all about advanced technology and weaponry,” Lee Miller, the founder of the Chinese economic surveyor China Beige Book, told me.
In response, American businesses need to consider how else Beijing’s decision-making may now be flipped on its axis. For everyone from American farmers to pharmaceutical companies, this means shrinking demand and unstable supply chains. For policymakers, it means a China that is harder to mollify when conflicts arise. For the rest of us, it’s a more precarious world.
The Insider goes on to share about China’s real estate market.
It’s been clear for years that the Chinese real-estate market has been in trouble. China has a population of 1.4 billion, but it has built housing for a population of 3 billion, according to expert estimates. Many of the mega-developments became empty monuments to Beijing’s insatiable desire for growth. In Shenyang, farmers have taken over a development of empty mansions for cattle grazing.
Real estate was a quarter of China’s GDP. It inflated the national economy and now property sits empty. The value of this property is rapidly declining. The Insider describes a dire situation for China.