Home sales are 30-40% below last year’s depressed level after the economy barely grew in the latest quarter, according to the owner, who would give only his surname, Cai. He has cut staff by 80% to 40 employees. Their income from sales commissions has fallen as much as 90%.
“People are worried,” said Cai. “They feel safer holding onto their savings instead of spending them.”
They’re pretty well fucked at this point - the combination of a shrinking population + lack of job prospects for young people + looming real estate value collapse means the working age generation is going to want to save every penny they can for retirement and/or spend it supporting their own elderly relatives, and the sort of social safety net that might prevent that is something China can neither afford nor stomach. And yet they have too many people + have alienated foreign partners too much to end up comfortably wealthy through stagnation, like Japan has.
No hope of a real consumer spending rebound, no irreplaceable high tech, neighboring countries offering cheaper manufacturing of increasingly elaborate goods… they had their moment and they blew it. Xi Jinping wanted to be the next Mao and I think history will look at him as that, but not in the way he was hoping for.
I would agree they’re going into a Japanese style series of lost decades.
Except: they’re big, really big, I completely underestimated how big they are.
They’re not close to fully urbanized, there’s still room left, I don’t think they’ll be as passive as Japan was the last 30 years.
The danger still seems to be over, but the end result is China is someone we’re going to have to deal with on the world stage for a long time, they’re sadly here and not going away. :(
My sadness is because the CCP is truly a monstrous dictatorship, we were stupid to think economic prosperity would magically lead to democracy, it just lead to a stronger dictatorship.
