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I took a bit of a break over Thanksgiving. Let's jump back in. This will be a long one.
Item One:
The biggest China story, in my opinion, is the MASSIVE resurgence of COVID/ flu/ pneumonia sweeping northern China at the moment. There are also stories of a rash of white lung, including deaths, primarily in small children. This is raising concerns among the Chinese people who don't know if they are going to go back into total lock down or if there are going to be widespread deaths from a disease the CCP can't seem to treat or contain. On top of this, the CCP seems to be downplaying the trouble and blaming it on Mycoplasma pneumonia.
A Beijing doctor who contracted the disease said, "There is no effective medication for this disease. I have tried all the drugs used to treat Mycoplasma pneumonia, but none have been effective. Therefore, I doubt this is Mycoplasma pneumonia."
Things are so bad the World Health Organization (WHO) is publicly demanding additional information. This is remarkable. I would sooner trust the rock band WHO to comment on this as the openly socialist 'health' organization.
Medical matters are NOT my long suit. If there is someone else on the thread with more knowledge I will gladly defer to you on this matter.
Item Two:
It is hard to believe it possible but the economic news for the PRC is getting worse. The Beijing, Shanghai, and Hong Kong stock exchanges went into meltdown following Xi Jinping's trip to the US where Joe Biden accidentally managed to tell the truth when he called Xi a dictator.
I see no way the real estate crisis gets any better in the foreseeable future. The CCP has decreed that banks MUST lend to a list of 50 large construction companies including Country Garden and EverGrande. Builders not on the list will find it difficult, if not impossible, to arrange financing. This will NOT help things and I think it is likely to make things worse.
The CCP has a history of solving political problems economically and economic problems being solved politically. Some local officials being prosecuted for financial mismanagement over local government debt woes. In this case, economic blame is undoubtedly being shifted to local officials through political means.
Item Three:
"Singles Day" (11/11) is the single biggest shopping day in the PRC. It is the Chinese equivalent of Cyber Monday. This year's sales were, in a word, dismal. Things were so bad that the CCP has been actively removing posts containing anything negative about Singles Day shopping.
Item Four:
The real estate resale market in China has entered a stampede collapse situation following Xi's return to from the US. That is, sellers have been dropping prices precipitously hoping for a sale. Ironically, this has caused a further downturn in resale purchases as people already financially hesitant to buy wait for still lower prices. This triggers further price reductions. Rinse and repeat.
Some commercial real estate brokers are reporting ZERO sales for the past month. There was one forecast that commercial real estate prices might see an 80%-90% drop by early next year in Shenzhen city in Guangdong province. This is immediately next to Hong Kong on the Pearl River and a generally prosperous part of China.
Personal Observation:
I think it is increasingly likely that there will be a complete collapse of the real estate sector in the PRC. As bad as this is, and it is REAL bad, it will only be the trigger for a bigger collapse. That collapse will be the PRC banking industry. What started earlier this year as an issue with people not being able to withdraw funds they had deposited in their local bank has spread to businesses large and small. In March of this year, Juneyao Airlines, the 6th largest in China, deposited 60M Yuan (~$8.4M US) in the Industrial and Commercial Bank of China. When they went to withdraw the funds in early October the funds were gone. There was another case of 250M Yuan disappearing from another company's account. This was blamed on embezzlement by a bank official leading to a life sentence. The bank's depositors where left without relief.
As the wave of real estate failures sucks the banks dry it is the depositors who will be hit the hardest. They will look to the national CCP for answers and relief. There will be none. The national CCP is almost as broke. The PRC lacks the social safety net that the US does. This is the point where large groups of angry people decide to go on long walks together in search of answers. When they don't get the answers and relief they seek, it will be a VERY good time to be anywhere else on the planet other than the CCP. Mogadishu would look inviting by comparison.
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)