🧵The Chinese Nightmare🧵
1/

There are still conservatives, and some NYT progressives who fear/dream that China's authoritarianism is going to outcompete the west economically and bring in a century of Centralized control

This isn't going to happen. China is all but collapsing

2/
Thanks to the one child policy China has amongst the worst demographics of any country in the world.

According to official numbers China's population is on track to decline from 1.4 billion to 700 million by century's end, Halving...

3/

But experts who track leaks and other metrics think it is even worse than the CCP's official numbers suggest. They suspect Chinese population growth is already negative and could drop below 1 billion as early as 2050.

4/

Economists and the better China watchers have know this was coming, and known China cannot sustain its retired population with so few workers and so little wealth

So there's been a question posed since 2008: Will China get old before it gets rich?

We now know the answer

5/

Baring some insane military play, involving not just Taiwan, but old school imperial conquest of large chunks of south-east Asia there's no real way for China to get around this apocalyptic societal problem... And even that probably wouldn't be enough

6/

30+% of China's economy is tied up producing one good: Real Estate.

This should be confusing.

How can an economy with a shrinking population be that dependent on real estate?

Supply & demand. Demand is shrinking so prices must be falling

LOL... oh you sweet summer child

7/

We've all seen the photos of China's ghost cities, hundreds of cities with thousands of massive housing complexes each, almost all sitting empty.

People assume the CCP is paying to build these as a make work scheme, but the truth is vastly, VASTLY Darker.

They're all sold.

8/

The Chinese have near the highest savings rate in the world, yet they don't trust the Stock or Bond market (understandably since there's no transparency)

So all their savings they pour into real estate.

9/

As a result China has the most expensive real estate in the world, by income

Despite a GDP of 10k per person (USD) condos in China average 200k in most cities and creep towards the million mark in others.

Parents mortgage their homes to help make their kids down-payment

10/

Many of the second and third condos Chinese investors buy never get finished

Indeed since living in a Condo throws off the Feng Shui for future inhabits leaving it unfinished actually improves its speculative value, or so they claim

It certainly hasn't stopped purchases

11/

If this sounds like the worst housing bubble ever, it is. The raw force of the demographic decline will inevitably destroy this bubble.

EverGrande was a huge scandal , but now citizens are striking and refusing to pay mortgages on condos that stopped mid build

12/

China doesn't have a meaningful social security system. They can't afford it

Horrible poverty exists near those shiny towers

Third world conditions are everywhere and that's what people will be reduced back to

The world once manufactured in the rust belt too

13/

You can already find stories about homeless encampments and Mongolian nomads moving into the carcasses of these unfinished ghost cities...

Soon millions living off well under 10k a year will wonder that their unfinished apartments once cost hundreds of thousands.

If you found this interesting Like, Retweet, follow, etc.

I also have a blog check it out, link in profile.