Although the unrest in China, covered in a previous piece for this paper, was dealt with swiftly and brutally it highlighted to the world that a current of dissent existed in the Chinese people. Tens of thousands took to the streets calling for the end of brutal lock downs and other extreme covid measures, however, these where not the only calls of some protesters. The little coverage global media attained captured some protesters carrying signs that would have been unimaginable two years ago. Some called for human rights and freedom, others called for the end to the Chinese Communist Party and the removal of the President Xi Jinping as seen here. The people are angry not only at the actions of the state but at the state itself. Often People are willing to accept curtailments to their personal freedoms in exchange for economic satisfaction and the centrally planned Chinese state has done just that. Lifting hundreds of millions out of poverty in two generations the
average Chinese person has gone from a rural labourer to an urbanised and modernised
global citizen.
Gone are the days of decades of 10% year on year GDP growth. The Chinese economy is slowing as it begins the transition into tertiary sector dominance as most economies do when they transition away from focusing on manufacturing. This slow down however poses a fundamental problem to the CCP. A generation of Chinese people will no long be guaranteed massive improvements in their quality of life compared to their parents.
The housing market has been rocked by institutional collapses such as the Evergreen group in September of 2022. People are not receiving house stock they have paid for as developers leave cities littered with concrete husks and price of new homes in 70 Chinese cities have fallen by 1.3% in the 4 the quarter of 2022. Nearly a third of all property loans
are now classes as bad debts.
The long term effects of the one child policy are also starting to be seen, millions of young men are unable to find partners as the massive gender imbalance takes hold. The population has declined in the past year by nearly a million people. The artificial generational imbalance is leading a shrinking work force and soon far to few tax payers to support a large scale social security and pension system
denying the elderly the economic stability promised by the system.
Although it would be foolish to bet against the Chinese economy long term indicators suggest a bull market is not guaranteed. Social, political and economic tensions pose an existential threat to the current party system, extreme violence has worked in the past as a tool for repression but its effectiveness is waning and the party’s grip may loosen with it.
Comments