Debt-ridden Chinese cities face brutal cutbacks

The debt trap is ensnaring many of China's cities. While Americans properly worry about the ballooning federal debt, China is already beginning to experience a crisis due to debts incurred by local governments. Bloomberg has a long article focusing on the city of Hegang, in the northeast province of Heilongjiang. Hegang, with a population of nearly a million, is in decline along with its coal industry and experiencing brutal spending cuts in order to keep up with its interest payments.

Hegang's residents are now feeling the brunt of the fiscal clampdown. During a recent visit to the city, locals complained about a lack of indoor heating in freezing winter temperatures, and taxi drivers said they were being slapped with more traffic fines. Public school teachers worried about rumored job cuts, and street cleaners endured two-month delays to their salaries.
Outside the city's largest hospital, a middle-aged orderly wearing green scrubs and a mask said her employers unilaterally changed her work contract from a government-run medical facility to a third-party vendor, reducing benefits like paid overtime for working on holidays. Her monthly wage of 1,600 yuan ($228) had been delayed by more than 10 days every month since late last year.
"I'm upset about the situation," said the woman, who asked not to be identified in order to talk freely about her work conditions, as she pushed a wheelchair loaded with flattened cardboard boxes to an outdoor recycling point. "Everything is so expensive. I can barely get three square meals a day."

Hegang (photo credit: STW932, CC BY-SA 4.0 license).

Hegang is experiencing problems that likely will spread elsewhere in China:

Goldman Sachs Group Inc. estimates China's total government debt is about $23 trillion,

This is the future throughout the world, as living on a "credit card" and making minimum payments, whether as an individual, a group, a company, a state or nation, comes to the same end.

As the title says, "cities face brutal cutbacks." Use Chinese as an adjective, or American or European or third-world, but the math is the same. This is why history is littered with defaults and abrogations of debt, as with write-downs and revolutions. Those who think this is untrue are fools or beneficiaries of the game. Tick tock.

The building boom of China was done by cooking the books with state owned enterprises. The cities are all new, and the consumption of concrete, steel, glass, etc made the government officials look great at every level up the chain.

Before, the export economy supported this addiction. No longer.

Covid closures showed the supply chains that they could not trust the CCP to be business first, and now everyone is finding new sources. Chinese labor costs are triple that of Mexico, for instance. BTW - Covid is running rampant in China again right now, with 65 million infections per week, but people are still working this time.

I’m going to Shanghai next month - it will be very interesting.

Well, now they're all seeking to get into the U.S.:

‘These Numbers Are Staggering’: Chinese Migrants Continue To Surge Across Southern Border

https://dailycaller.com/2023/05/22/these-numbers-are-staggering-chinese-migrants-continue-to-surge-across-southern-border/

Those migrants will all be voting Democrat - like the ones that came before them and for a continuation of what they left back in the old country.

Asians vote ≈ 65% Democrat

I will be quite happy to let you know what I see. I’ve been going to China on occasion since 2009, so I saw the growth years - the huge construction boom.

This will be my first visit to Shanghai, and my in laws are not Party members- so I’ll be seeing daily life there. (But staying in a very nice hotel - this is my one vacation for the year.)

Thank you for your interest.

The problem with command economies like China's is eventually 'the elites' move in for their own benefit - - and the system starts collapsing.

During that time there's a 'get tough' with 'the corrupt' .. but it never works. Show trials, the boot, won't work because it's bad incentives. A change on 'who makes the rules' is telling but won't solve the problem. So while your visiting China see who's being blamed for the current problems... that's a hint about what stage they're at.

Capitalism's the only economic system that creates enough layers that an idiot can run the country without ruining it. (well, not forever but for enough years until we can elected someone other than President Sniffer)

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