Evergrande/China

T

TSSeasider

Well-known member
I've been watching for some time from a very long way away, the potential fall out of this.

Briefly, a property bubble built on ever expanding debt has burst with this one company having debts of £300bn - most of it ordinary Chinese folk who aren't going to get their properties built.

It appears as though the people in charge are now in custody.

The rise of the Chinese middle classes has led to a declining birth rate (which is ironic given the historic one child per family policy) and levels of dissatisfaction for millions of others.

The question is, will the CCP step in and support the individuals who are likely to lose everything, or will they stand by and let the market do it's thing.

And will this lead to some form of population uprising or will more people long for the simpler life of communism and not this state controlled capitalism.

Don't know, but it may mean China take a more considered approach to the sabre rattling if they need to control the 1bn people in its own borders.

It could be the start of something major - or it might just be the bankruptcy of one business.

www.bbc.co.uk

China's Evergrande halts trading amid reports of detained bosses

The stricken Chinese property giant suspends trading as reports emerge of its chairman being taken.
www.bbc.co.uk
 
They are in trouble..but China doesn't work like a 'normal' economy and people have been making videos and predictions like that for ages.

I lived there from 2011 to 2019. There were experts predicting the housing bubble to pop from the start.
I've been to the city in the article below, it felt like 28 days later.
https://www.bbc.com/news/magazine-17390729

From my limited understanding of the issue and conversations with Chinese friends, the bubble never pops in part because of the government can manipulate companies like Evergrande..and basically the whole economy. Nobody really understands the state the housing market and economy is in because these manipulations aren't visible...so we're just left with the idea that this isn't tenable forever.

There's that line from Hemmingway when asked how he went bankrupt.

'Gradually, and then all at once.'

The answer to when will the Chinese economy collapse seems to be 'never, and then all at once.'
 
They've kept the authoritarian aspect of communism, and certain cultural aspects, just not the economic.
Deng Xiao Ping was mainly responsible for kickstarting the record growth with his 'To get rich is glorious' pivot.

theconversation.com

'To get rich is glorious': how Deng Xiaoping set China on a path to rule the world

China’s staggering growth over the past 40 years is due to the force of personality and risk-taking of a man who stood barely 1.5m tall.
theconversation.com theconversation.com

The really interesting discussion is about how Xi has changed the power structure internally to become a supreme leader. That was never meant to happen.

When Hu Jin Tao stepped down as leader it was partly due to age but mostly because there were strict term limits to prevent a Putin/Kim Jong situation.

The central committee (about 350 party members but with inner hierarchies, factions and plots we don't know about) had a choice between Xi and the Mayor of Chongqing a guy called Bo Xi Lai. Bo was a far more charismatic leader, innovative and more open to closer ties with the West.
He actually sent his son to Oxford, his wife had a summer home in Bournemouth and Jackie Chan turned up to their birthday parties as a family friend.

So nobody really knows the truth, but one theory is the committee selected Xi because he was far more traditional, predictable, open to consensus. John Major over Tony Blair.
Xi couldn't have a more charismatic and popular guy waiting in the wings, and so sabotaged Bo.

You could fill a good book writing about Bo...but the short version is that his wife 'murdered' a British businessman...Bo's police chief went mad/tried to defect by dressing up as a woman and breaking into the US embassy...and Bo got sentenced to life in prison for corruption...except he and his family disappeared and he still owns property in Cannes and the UK.

Xi became the leader and launched an anti corruption campaign nicknamed 'kill the tigers, kill the mosquitoes'...basically saying zero tolerance for corruption at all levels.

Except the governmental system in China IS corrupt at all levels, so by selectively targeting former Bo supporters (and anyone who didn't declare their undying fielty to Xi), he managed to reshape the whole party in a move reminiscent of Mao.

Because everyone else was corrupt, they were scared to speak up about the targeted corruption campaign and so either fled the country or allied with Xi. This became such a binary choice in recent years that even apolitical figures like Ali Baba CEO Jack Ma or tennis player Peng Shuai went 'missing' for not being seen as allies.

The big unknown is whether Xi really has the balls to do anything about Taiwan, if and when the economy collapses...or whether he uses the sabre rattling to quell any murmurs of discontent in the party.
That's why China dealt with COVID so differently to the rest of the world and why it's bonkers to think it was a plandemic.
 
Chunkylad said:
It’s a really interesting country China.

It’s communist but not really. It’s more somewhere between a dictatorship or more like a feudal kingdom where the King trust his loyal advisors but basically all follow.
Click to expand...
Whatever you think about what Chinas' situation is, the fact is that it is a Totalitarian Regime.
This means that there is NO democracy, the people are under the thumb of a very small minority.
What 'those who rule' say. goes.
Full stop.
 
Davepick said:
Whatever you think about what Chinas' situation is, the fact is that it is a Totalitarian Regime.
This means that there is NO democracy, the people are under the thumb of a very small minority.
What 'those who rule' say. goes.
Full stop.
Click to expand...
At least ours have the decency to smile.
 
Davepick said:
Whatever you think about what Chinas' situation is, the fact is that it is a Totalitarian Regime.
This means that there is NO democracy, the people are under the thumb of a very small minority.
What 'those who rule' say. goes.
Full stop.
Click to expand...

Agreed. As I said somewhere between dictatorship or kingdom. Definitely not communism as it was written.

That said we are a democracy also ruled by a small group of power brokers or certainly have been in recent times.
 
Chunkylad said:
Agreed. As I said somewhere between dictatorship or kingdom. Definitely not communism as it was written.

That said we are a democracy also ruled by a small group of power brokers or certainly have been in recent times.
Click to expand...
However, we do have 'freedom of speech'.
 
Chunkylad said:
It’s a really interesting country China.

It’s communist but not really. It’s more somewhere between a dictatorship or more like a feudal kingdom where the King trust his loyal advisors but basically all follow.
Click to expand...
It's a very interesting point. The extremely large countries (Russia, Canada, USA, China Brazil, Australia and India) have complex issues of stability to deal with in order to exist as sovereign countries. The more easily governable of these large countries are Canada and Australia because their populations are relatively small and are located around their geographical peripheries: Canada and Australia. The others, which have large populations either maintain their cohesion through authoritarian control: Russia and China. Or they can be essentially democratic allied to a heavily orchestrated patriotism: the USA. Or, they exist perpetually on the brink of instability - with continual internal conflict: India and Brazil. The concept of left/right politics is subordinate to the rigorous need to maintain stability in such large and heavily populated countries
 
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