China is undergoing a 2008 style financial crisis due to real estate speculation and deflation due to very weak domestic spending.

They have drowned their municipalities in debt cumulatively equivalent to the US federal and state debt as a percentage of GDP. Localities aren’t allowed to tax but are responsible for local services and industry. Local governments borrowed heavily to hit GDP growth targets and compete with each other for investment and talent.

There is now a backwards migration of the working class back to rural towns from the cities because the incentives China gives is towards technologies that only benefit their already upper-middle class workers. About 500 million Chinese live in rural areas and over 20% of their workforce toils in the fields. That’s not changing anytime soon. Youth unemployment has been 15-20+ percent for some time.

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smallmancontrov 11 hours ago | parent [-]

Refusing to bail out real estate speculators was bold and painful, but I'm not sure it was wrong.

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dirck-norman 10 hours ago | parent [-]

Not at all what’s happening. China’s government privatized real estate and was the engine of the bubble by disallowing localities from taxing and only allowing revenues via land sales. See above how central planning in the CCP has forced massive debt upon localities.

State banks backed Evergrande’s with cheap credit and govt guarantees.

Local officials were promoted for hitting GDP growth targets - see above how they put localities deep in debt by speculating on real estate.

The CCP gave households social credit for moving to cities and buying real estate.

The CCP is not protecting consumers in the aftermath. They won’t let consumers out of mortgages for unfinished condos because they don’t want the crisis to worsen - effectively bailing out developers.

Not sure where you came up with the idea that China is acting in the interest of its citizens rather than the state. That’s not a fundamental characteristic of an autocratic socialist state.

	▲	smallmancontrov 9 hours ago \| parent [-]
		The citizens with real estate were the speculators. They gambled on being able to squeeze even more out of the next guy and they lost. In the US, we would just have taxed the kids (again) to bail out the homeowners (again). I have a hard time calling that more responsible.