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I was one of those people that thought China would never collapse due to its iron grip on economy and population. But look at recent activities * Chinese GDP

I was one of those people that thought China would never collapse due to its iron grip on economy and population. But look at recent activities * Chinese GDP shrinks to 0.4% in Q2 2022. Which is still suspicious because Shanghai economic activities declined -40%, and real estate overall activities dropped -30% * Massive mortgage boycott. Also public protests against lost deposits and unable to access bank is being aired out in Chinese social media. Also property bond crash spreading * The 1 billion people data leak has some experts analyzing the data and figuring that the Chinese population is already in decline, and only at 1.2B currently. Which means the population is going to half its size sooner than 2100 * Chinese firms are still selling Russia good its military needs https://www.wsj.com/articles/chinese-firms-are-selling-russia-goods-its-military-needs-to-keep-fighting-in-ukraine-11657877403 https://www.wsj.com/articles/chinese-firms-are-selling-russi..., incurring the wraths of normal folks in Europe and other allied countries. * Zero covid practice still going on, with tons of public discontent. There are videos of the people waiting in line to test in the pouring rain and huge wind! * Zeihan gaining more popularity, which implies that people do believe that China is crashing. Foreign investors and companies are pulling out in record numbers * public sector employees taking 30% salary cuts Makes me think there will be a massive public unrest and Chinese government will likely collapse soon. What do people think?

01100011 4y ago
China is at risk of following Japan into stagnation. It is especially likely given the massive wave of manufacturing repatriation going on now. If China loses its position as the world's manufacturer, it will have to rely on its untested military strength to obtain resources to appease its restless population. Interesting times indeed.
- chii 4y ago
  > China loses its position as the world's manufacturer they will not because the reason japan (and the US) lost theirs is that china was cheap. Where are you going to get this type of labour - skilled but cheap - other than china, in the next 10-30 years? Southeastern asian countries could make up some of the amount, but if they could do it today, they would've dominated already! The repatriation of manufacturing is political propaganda - it won't work economically, as consumers' preferences is overwhelmingly for cheap goods, not expensive patriotism.
  - 01100011 4y ago
    One scenario: USD is weakened by a BRICS* based basket of currencies and the US is released from the chokehold of the Triffin Dilemma. Another scenario: Automation makes labor costs less relevant. Anyway, it's happening already. Tons of news articles covering it lately. For instance: https://www.bnnbloomberg.ca/us-factory-boom-heats-up-as-ceos-yank-production-out-of-china-1.1787900.amp.html https://www.bnnbloomberg.ca/us-factory-boom-heats-up-as-ceos... > but if they could do it today, they would've dominated already Weird logic. I don't follow.
    - chii 4y ago
      > Weird logic. I don't follow. There's no indication that the manufacturing capacity could be taken over by a south-eastern asian country. If they could do so, why is it not done today, rather than in the future (when china loses their manufacturing capacity)?
      - cyberlurker 4y ago
        It’s been happening. One example is Vietnam.
      - ericmay 4y ago
        Because it takes time to do so? I don’t think companies are going to fully leave the Chinese market or anything. That wouldn’t make any sense. But divest their exposure and locate factories all around the world because of the risk due to concentration? Yea definitely.
      - lvnfg 4y ago
        Changes take time, and there are massive opportunity costs to moving your supply chain base elsewhere. If other countries can do manufacturing equally well (same quality, cost, legal environment, etc), but you already have your base fully established in China serving your entire global operations, moving to the another country gives you no benefits, and you face the risk of severe disruptions to your operations if anything goes wrong. So the world will only move out of China if other countries like India can offer significantly lower cost at same quality, which they haven't been able to do, or if there are significant geopolitical risks to staying, which seems likelier by the day.
jpgvm 4y ago
Same story has been foretold over and over for the last 30 years. I will believe it when I see it. The RE bubble is bad but substantially less bad than what the US was facing in 2008. There is a big difference between over-leveraged developers (the Chinese problem) and rotten Main street banks (which was the US problem). In China's case we are likely going to see a continued drop in housing prices for a little bit longer until they plateau. However they are unlikely to see growth again for a long time unless Chinese government changes tact. This isn't a bad thing as right now Chinese homes are some of the most unaffordable on the planet, especially in desirable cities. Also it will lead to speculation and investment moving outside of RE and into other vehicles like equities which will improve the breadth and quality of Chinese financial markets. The other bad things that will happen is construction companies will likely be in distress, large infrastructure projects/spending directed by the CCP will save the good ones but there will be a bunch of consolidation and downsizing. Not a particularly bad thing given the changing population dynamics probably requiring the construction of less housing than previously. Impact is unlikely to spread beyond RE because of how compartmentalized funding is in China. The government controls all the major banks and as a result they run under very low-risk capital regimes. It's much more likely the big financial fallout will be from foreign investors that were greedily holding onto risky Chinese commercial paper. All-in-all I actually suspect this to go out with a whimper rather than a bang. The way systems are setup in China there just isn't really the potential for a bang outside of like big social issues causing a revolution or something but generally speaking that doesn't happen. Usually as dissent grows they recognize it won't go away and start doing something to appease the people. Recent example being their effort to deal with pollution in the major cities, etc. So yeah. I get that Western folks, Americans in particular don't understand the Chinese system and wish ill will upon it but the reality is that it's a lot more robust than said folks give it credit so don't bet on it failing anytime soon.
- atwood22 4y ago
  How are over-leveraged developers that different from what caused the 2008 global financial crisis? The cause of the GFC was that assets were labeled as safe but were in fact unsafe. So one day everyone woke up and had less money than they thought they had. The same thing can happen from over-leveraged developers. Banks lend money to people to buy real-estate. Everyone expects those units to exist, and if they suddenly don't exist en-masse, then that's going to be a major shock.
paganel 4y ago
> incurring the wraths of normal folks in Europe and other allied countries. We have our own issues here in Europe with incurring wrath on Russia, thank you, we can't take two at a time. Or at least I hope we won't f.ing take two at a time, the gas prices being what they are is bad enough.
bigcat12345678 4y ago
> * ... GDP shrinks to 0.4% in Q2 2022 ... GDP growth > Massive mortgage boycott. Probably won't be as bad as 2008. > The 1 billion people data leak has some experts analyzing the data ... Link please? > Chinese firms are still selling Russia good its military needs What do you expect? China does not sanction Russia. And USA is hard pushing China in all China's surrounding areas: Taiwan, South China Sea, Xinjiang, South East Asian... Punching a cow and you'll be paled. > incurring the wraiths of normal folks in Europe and other allied countries. "Wraiths"? Can we first see the wraith be unleashed onto the Russian troops in Ukraine, which supposes to incur even more "wraiths"... > Zero covid practice still going on, with tons of public discontent. There are videos of the people waiting in line to test in the pouring rain and huge wind! You can measure how anger the US public is towards their covid policy, vs Chinese public's reaction. ANY public policy is going to err some people, especially in a country with close to 5 times the population of USA. > * Zeihan gaining more popularity, which implies that people do believe that China is crashing. Foreign investors and companies are pulling out in record numbers Who/what is Zeihan? > * public sector employees taking 30% salary cuts Err... Link please...
- _kbh_ 4y ago
  >> The 1 billion people data leak has some experts analyzing the data ... > Link please? https://www.reuters.com/world/china/hacker-claims-have-stolen-1-bln-records-chinese-citizens-police-2022-07-04/ https://www.reuters.com/world/china/hacker-claims-have-stole...
  - bigcat12345678 4y ago
    I am asking the "analyzing data" part, and the conclusion of 1.2B population.
    - kccqzy 4y ago
      OP was probably referring to https://twitter.com/fuxianyi/status/1545668143816839170 https://twitter.com/fuxianyi/status/1545668143816839170? But then the person tweeting this has been making the same argument since 2014. So the recent leak could have just been confirmation bias for him.

01100011 4y ago

China is at risk of following Japan into stagnation. It is especially likely given the massive wave of manufacturing repatriation going on now. If China loses its position as the world's manufacturer, it will have to rely on its untested military strength to obtain resources to appease its restless population. Interesting times indeed.

chii 4y ago
> China loses its position as the world's manufacturer they will not because the reason japan (and the US) lost theirs is that china was cheap. Where are you going to get this type of labour - skilled but cheap - other than china, in the next 10-30 years? Southeastern asian countries could make up some of the amount, but if they could do it today, they would've dominated already! The repatriation of manufacturing is political propaganda - it won't work economically, as consumers' preferences is overwhelmingly for cheap goods, not expensive patriotism.
- 01100011 4y ago
  One scenario: USD is weakened by a BRICS* based basket of currencies and the US is released from the chokehold of the Triffin Dilemma. Another scenario: Automation makes labor costs less relevant. Anyway, it's happening already. Tons of news articles covering it lately. For instance: https://www.bnnbloomberg.ca/us-factory-boom-heats-up-as-ceos-yank-production-out-of-china-1.1787900.amp.html https://www.bnnbloomberg.ca/us-factory-boom-heats-up-as-ceos... > but if they could do it today, they would've dominated already Weird logic. I don't follow.
  - chii 4y ago
    > Weird logic. I don't follow. There's no indication that the manufacturing capacity could be taken over by a south-eastern asian country. If they could do so, why is it not done today, rather than in the future (when china loses their manufacturing capacity)?
    - cyberlurker 4y ago
      It’s been happening. One example is Vietnam.
    - ericmay 4y ago
      Because it takes time to do so? I don’t think companies are going to fully leave the Chinese market or anything. That wouldn’t make any sense. But divest their exposure and locate factories all around the world because of the risk due to concentration? Yea definitely.
    - lvnfg 4y ago
      Changes take time, and there are massive opportunity costs to moving your supply chain base elsewhere. If other countries can do manufacturing equally well (same quality, cost, legal environment, etc), but you already have your base fully established in China serving your entire global operations, moving to the another country gives you no benefits, and you face the risk of severe disruptions to your operations if anything goes wrong. So the world will only move out of China if other countries like India can offer significantly lower cost at same quality, which they haven't been able to do, or if there are significant geopolitical risks to staying, which seems likelier by the day.

jpgvm 4y ago

Same story has been foretold over and over for the last 30 years. I will believe it when I see it. The RE bubble is bad but substantially less bad than what the US was facing in 2008. There is a big difference between over-leveraged developers (the Chinese problem) and rotten Main street banks (which was the US problem). In China's case we are likely going to see a continued drop in housing prices for a little bit longer until they plateau. However they are unlikely to see growth again for a long time unless Chinese government changes tact. This isn't a bad thing as right now Chinese homes are some of the most unaffordable on the planet, especially in desirable cities. Also it will lead to speculation and investment moving outside of RE and into other vehicles like equities which will improve the breadth and quality of Chinese financial markets. The other bad things that will happen is construction companies will likely be in distress, large infrastructure projects/spending directed by the CCP will save the good ones but there will be a bunch of consolidation and downsizing. Not a particularly bad thing given the changing population dynamics probably requiring the construction of less housing than previously. Impact is unlikely to spread beyond RE because of how compartmentalized funding is in China. The government controls all the major banks and as a result they run under very low-risk capital regimes. It's much more likely the big financial fallout will be from foreign investors that were greedily holding onto risky Chinese commercial paper. All-in-all I actually suspect this to go out with a whimper rather than a bang. The way systems are setup in China there just isn't really the potential for a bang outside of like big social issues causing a revolution or something but generally speaking that doesn't happen. Usually as dissent grows they recognize it won't go away and start doing something to appease the people. Recent example being their effort to deal with pollution in the major cities, etc. So yeah. I get that Western folks, Americans in particular don't understand the Chinese system and wish ill will upon it but the reality is that it's a lot more robust than said folks give it credit so don't bet on it failing anytime soon.

atwood22 4y ago
How are over-leveraged developers that different from what caused the 2008 global financial crisis? The cause of the GFC was that assets were labeled as safe but were in fact unsafe. So one day everyone woke up and had less money than they thought they had. The same thing can happen from over-leveraged developers. Banks lend money to people to buy real-estate. Everyone expects those units to exist, and if they suddenly don't exist en-masse, then that's going to be a major shock.

paganel 4y ago

> incurring the wraths of normal folks in Europe and other allied countries. We have our own issues here in Europe with incurring wrath on Russia, thank you, we can't take two at a time. Or at least I hope we won't f.ing take two at a time, the gas prices being what they are is bad enough.

bigcat12345678 4y ago

> * ... GDP shrinks to 0.4% in Q2 2022 ... GDP growth > Massive mortgage boycott. Probably won't be as bad as 2008. > The 1 billion people data leak has some experts analyzing the data ... Link please? > Chinese firms are still selling Russia good its military needs What do you expect? China does not sanction Russia. And USA is hard pushing China in all China's surrounding areas: Taiwan, South China Sea, Xinjiang, South East Asian... Punching a cow and you'll be paled. > incurring the wraiths of normal folks in Europe and other allied countries. "Wraiths"? Can we first see the wraith be unleashed onto the Russian troops in Ukraine, which supposes to incur even more "wraiths"... > Zero covid practice still going on, with tons of public discontent. There are videos of the people waiting in line to test in the pouring rain and huge wind! You can measure how anger the US public is towards their covid policy, vs Chinese public's reaction. ANY public policy is going to err some people, especially in a country with close to 5 times the population of USA. > * Zeihan gaining more popularity, which implies that people do believe that China is crashing. Foreign investors and companies are pulling out in record numbers Who/what is Zeihan? > * public sector employees taking 30% salary cuts Err... Link please...

_kbh_ 4y ago
>> The 1 billion people data leak has some experts analyzing the data ... > Link please? https://www.reuters.com/world/china/hacker-claims-have-stolen-1-bln-records-chinese-citizens-police-2022-07-04/ https://www.reuters.com/world/china/hacker-claims-have-stole...
- bigcat12345678 4y ago
  I am asking the "analyzing data" part, and the conclusion of 1.2B population.
  - kccqzy 4y ago
    OP was probably referring to https://twitter.com/fuxianyi/status/1545668143816839170 https://twitter.com/fuxianyi/status/1545668143816839170? But then the person tweeting this has been making the same argument since 2014. So the recent leak could have just been confirmation bias for him.