Qi，Bo ：How Terrible is China’s Economic Crisis
齐波（Qi，Bo）
“Recently, a series of economic events in China have shocked the world. China’s economic situation has deteriorated in an all-round way. For the first time, the troika of investment, consumption, import and export has simultaneously declined. Real estate giants have exploded one after another. The producer price index has fallen across the board, the people are frugal, and their consumption has been downgraded, the youth unemployment rate has broken historical records, foreign direct investment has hit the lowest level in 30 years, the total import and export volume has dropped by 13.6% annually, and the value of the RMB against the US dollar has fallen to the lowest point in 16 years... …” A slew of dismal indicators suggests that China, the world＇s second-largest economy, appears to be teetering on the brink of a crisis. Real estate factors: The explosion of China＇s real estate industry has become the fuse of China＇s economic crisis, triggering a series of social crises including local government financial crises. Over the years, the real estate industry has developed unsustainably and rapidly through a large amount of debt, forming huge risks. Although the authorities know that it is unsustainable, to control and plunder national wealth through real estate, they continue to expand the disorderly development of the real estate industry in disregard of market laws, making it the most important means of robbing national wealth by the government, dignitaries, and capital. It is only a matter of time before it becomes a time bomb for China＇s economy, and it will finally explode now. Domestic demand factor: China＇s economic development has not solved the problem of the low ratio of national income to GDP in the past 40 years. The fundamental reason is that the marketization of China＇s economy is dominated by power. Under the one-party dictatorship, the official power has absolute control over society, resulting in serious social injustice. The public power and capital colluded to plunder the wealth of the whole people. Unable to enjoy the dividends brought about by the rapid economic growth, the social class is severely divided, and the gap between the rich and the poor is becoming increasingly wide. In the past three years, the epidemic has forced an extremely harsh policy of clearing society. Power has trampled on the rights of the people to the extreme. The economy of the entire country has collapsed, resulting in the eradication of society and the eradication of national wealth. Consumption downgrades, domestic demand worsens, and China＇s economic development is seriously weak. Local debt factors: China’s local government debt is estimated to be as high as RMB 94 trillion, accounting for 76% of economic output. Internationally, the safety line is usually set at 60%. Most provinces are currently heavily in debt and fiscal revenue is in a state of negative growth. Since the legitimacy of governance comes from economic growth, economic performance standards have become the main means of promotion for local officials, prompting local officials to drive economic growth through the four elements of land, infrastructure, real estate, and debt. This deformed model of driving economic development by extracting market factors such as land, labor, and capital has now come to an end. The three-year epidemic has put heavy pressure on public finances. Under the outbreak of the economic crisis, local debts in land, infrastructure, and real estate can no longer be used. Under its economic driving force, local bureaucrats intensified their impulse to grab people＇s wealth by unscrupulous means, making the economic crisis and social crisis intertwined and deepened. Real estate, domestic demand, and local debt are the deep-seated factors that have caused China＇s economic crisis. They are caused by the fundamental structural flaws of the CCP＇s totalitarianism, so it is impossible to solve them simply through economic means, and the fundamental political solution has nothing to do with the CCP＇s totalitarianism. Governance conflicts, so there is no solution to China＇s economic crisis. Now is the beginning of China＇s economic collapse. It can be predicted that China＇s economy will enter a long period of recession in the future, and prosperity will no longer exist.
Qi，Bo
August 20, 2023
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