re: #151 ericblair

This crisis is really, really bad, and the Chinese government is trying to land this particular plane after the engines have fallen off and the cabin is on fire. Chinese people don’t have a lot of options to invest, so real estate was really the only game in town. The government liked it because this sort of malinvestment could magically turn debt into GDP for years and years.

The contagion risk here for the entire economy is obvious. Huge numbers of people working these projects are out of work, and people’s life savings are gone. Despite China calling itself “communist”, there’s hardly any state social support and as far as retirement is concerned, you’re on your own.

More worrisome for the government is the fact that people are banding together outside of government-run and -approved organizations, and these new groups have a habit of growing into actual political forces.

The linked BBC articles are also bad indicators, at least for now. One is on burnout and unemployment among youth—expected to keep up the 9-9/6 days a week work schedule, some (no percentages available) are checking out and living with parents while getting crushed by the unemployment of younger workers who will willingly endure those hardships (to a point) to have a job. Xi Jinping: “eat bitterness” [like I did in the Cultural Revolution, I guess].