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For those waiting to see which will collapse first, the CCP or the PRC economy, just wait. Things like this happen slowly, slowly, slowly, then all at once.
I am standing by my prediction that the CCP will collapse sometime in the next two years. I am wondering if I am being overly optimistic about the CCP's ability to hang on to power. Things are bad, really bad in the PRC. I do not think it is possible for the PRC economy to reform enough for it to avoid collapse. Consider, if you will, the following items with the caveat that each one of these items is worthy of its own post exceeding twice the length of this update.
Item One:
Chinese local government debt is estimated to exceed 94 TRILLION Yuan or about $13.12 trillion. Over the first six months of 2024 local governments issued ~$590 billion dollars in debt. About 60% of this was to roll over existing debt. The rest was to finance new projects and to cover operating expenses.
It will take ~$418B per year just to cover the local debt. The biggest problem here is that this is off-balance sheet or unofficial debt. Chinese official debt, at all levels, is already bad enough. The CCP requires the 6 largest banks in China to purchase 'patriotic' bonds even if the likelihood of repayment is slim. This leads us to the next problem.
Item Two:
According to the Bank of China, 50 small to medium sized banks have failed in the first half of 2024. These failures resulted in involuntary mergers with larger, more stable banks. The primary reasons given for the failures include under-performing assets, financial mismanagement, and inadequate capital replenishment. These under-performing assets are almost all related to the collapse of the Real Estate sector.
Item Three:
You have heard me report here on the trials and tribulations of the Chinese Real Estate sector. In China, apartments are sold and paid for with mortgages before construction ever starts. If the builder doesn't finish the building, the buyer still has to keep making the payments even if they can't live in the property.
To try and put some scale to the problem, there are more UNFINISHED apartments and houses in China than there are houses and apartments in Germany, Holland, and Denmark combined.
The financial stress these loans are putting on the buyers are resulting in people defaulting on their loans. Interestingly enough, many banks are NOT pushing forward with foreclosure proceedings even in cases where there is no legal impediment to them doing so. The reason for this is that as long as they don't foreclose, they don't have to carry the loan on their balance sheet as bad debts.
For a measure of the scale of the problem There have been 202,000 residential foreclosures in China in the first half of the year. This is a 12% increase compared the the same period last year. On top of this only about 30% of foreclosed properties are successfully sold.
Item Four:
There is a surge in COVID-19 cases throughout the country. There are also surges in influenza and pneumonia. This seems to affect all ages but is higher in the young and very old. There are also reports of outbreaks of anthrax primarily in rural areas with several hundred people seriously affected.
Crematoriums are backed up throughout the county but primarily in the cities.
Item Five:
There is a MASSIVE employment crisis in China among recent college graduates. Over the next five years, colleges will turn out about sixty million new graduates but the economy will only be able to absorb less than twenty million of those graduates. This tends to depress wages at all levels but hits, as usual, the less well educated the hardest.
All of these items are putting large amounts of stress on Chinese society leading to the one thing the CCP fears more than all others, social unrest.
The CCP was happy to take credit for the boom time from 1990 to 2020.
At some time in the not too distant future the CCP will have to answer for their failure to keep the good times rolling. At this point, the whole stinking house of cards will come crashing down on their heads.
It's gonna be BIBLICAL. 
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)