Xi is desperately trying to hide the extent of the damage from the collapse of the property market (like he did with Covid), but that is only going to make things worse when it comes to their economic progress (which can be tracked from the outside), as he is just building the proverbial dam higher and higher.
This may all be true, but I don’t see that it is supported by your link. The article says that money managers are shifting money out of Chinese stocks. It implies that Xi isn’t doing enough – " But the actions have fallen short of the “bazooka” many investors think is required."
It’s interesting that
“A third of fund managers named Chinese commercial real estate as the most likely source of a ‘systemic credit event’ in the September instalment of Bank of America’s monthly poll, with the proportion more than doubling since last month to eclipse concerns over US commercial property.”
So apparently, when they asked about the most likely systemic credit event in August, the most common response was US commercial property.
This is what I have been referring to in this thread.
Their governance is dysfunctional because they don’t trust their people unless they have known them for decades. Ideology and corruption creates huge economic inefficiencies as you have too much censorship and need to control.
I like to refer to this issue as Heisenberg’s uncertainty principle applied to political ideology: the more you try to control a complex economic system, the larger the economic inefficiencies that arise. The old USSR was a good example of this as well.
Chinese Military (PLA) has huge corruption problems
Xi is only really interested in loyalty because the only thing he truly fears is being purged himself by insiders.
I agree with what you say but perhaps it could more accurately be referred to as the observer effect.
Historically, the uncertainty principle has been confused with a related effect in physics, called the observer effect, which notes that measurements of certain systems cannot be made without affecting the system,
Not sure observer effect applies as you are not simply observing an event, you are in fact applying force (momentum) to the system as well, in order to achieve a desired outcome (expectation).
In any event, I recognise its not a perfect analogy but the trend in China seems fairly clear. Xi is increasingly trying to centralise power, and the circle of influence around him is shrinking. This is having increasingly negative effects on governance at all levels.
This reminds me a lot of how the old Politburo of the USSR functioned. The members became disconnected from the country, and you ended up with poor economic outcomes because people ended up telling them what they wanted to hear (as they were afraid to be purged for not showing enough loyalty), as opposed to the actual economic reality.
It’s so curious how China can blend capitalism and communist authoritarian. They seem at odds. But real estate is pretty cool.it’s a blend of capital and regulatory approval. The key might be “controlled corruption”
As long as the bribes are flowing to the politicians and the real estate capitalists and banks are happy, it’s smooth sailing for Xi. If that goes south, hard to say what the political and social ramifications could be. So it might be a bigger crisis than meets the eye.
Evergrande on Thursday said its chair, Hui Ka Yan, had been placed under “mandatory measures” on suspicion of involvement in “illegal crimes”, a sign of escalating government pressure on the Chinese developer almost two years after its default shook global markets.
I see, “illegal crimes” as opposed to the legal ones?