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Item One:
There was a conference on the state of the PRC economy between Bank of China officials and CCP officials, but I repeat myself. They issued a six part closing statement.
1. Being bearish on China and talking down China is doomed to fail.
2. There is no deflation in the Chinese economy.
3. The exchange rate between the Yuan and the dollar is not the whole story. (Note: While the Yuan is showing record weakness against the dollar it seems to be holding against currencies which are not tied to the dollar.)
4. There is support for local, grass roots, stability.
5. The interest rate for most qualifying first home loans will be reduced.
6. The development of high-end equipment manufacturing is positive.
This should tell you exactly what policy makers are concerned about.
Item Two:
There is an ongoing wave of closings of public bus companies. This is happening throughout China and not just areas hit by recent bad weather. It seems like the bus companies never successfully recovered from their losses during COVID. On top of that, the central, provincial, and local governments have reduced subsidies to bus companies in the face of their mounting budget woes. The PRC relies much more on public transport than the US does. As such this will hit blue collar Chinese the hardest and likely to be just one more thing likely to spark social unrest.
Item Three:
The PRC military is ratcheting up its provocations against Taiwan. On September 18th and 19th alone the Taiwanese Ministry of Defense reported 150 incursions against their Air Defense Identification Zone (ADIZ). Sixty-seven of these aircraft crossed the median line of the Taiwan Strait. Concurrently there were sixteen PLAN vessels, including one carrier, operating around the Taiwan Strait. There was a recent incident involving a Canadian destroyer being harassed transiting the Taiwan strait. When the PLAN ships realized that there was a US Arleigh Burke-class destroyer nearby also transiting the strait they departed at high speed.
One Taiwanese analyst said that the PRC's massive air incursions was a form of "Blow the whistle and walk the night road." This phrase in Chinese implies that someone is taking certain actions to divert attention or cover up underlying conflicts. In this context, it involves using military aircraft and vessels to bolster its own confidence while concealing internal conflicts and tensions between CCP leadership and the military. This is meant to mask the high level of distrust between Xi Jinping and the military, as well as significant instability within the Xi regime. The CCP's increased military threats toward Taiwan are primarily a cover-up for "Cold Civil War" that has erupted within the party. This political struggle is taking place behind the scenes and could potentially develop into a "hot civil war" involving coups, mutinies, or even assassinations.
I am NOT predicting that this will happen but you will not that I said that it might in one of my updates last week.
WWG1WGA
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)