China's housing market levitation could soon crash

 Aaron Hirschi:

After years of pretending the Chinese Communist Party (CCP) was immune to market forces, there is a serious possibility of a Chinese “Lehman Brothers moment” – a major financial bankruptcy potentially triggering a cascade of defaults -- creating an economic hard landing.  If giant real estate developer Evergrande does default on its $300 billion debt, then there is a real possibility of China experiencing its first severe recession in over 30 years.  This dangerous possibility is happening just one year after the CCP’s mismanagement caused a worldwide pandemic and will likely further degrade the CCP’s political standing. 

So, what options are available to the CCP and how will this impact Xi Jinping’s ambitions?

A realistic assessment requires an understanding of both the CCP’s current standing and motivation as well as an evaluation of how previous economic disasters have impacted totalitarian states.  Despite some projections, a single major economic setback is unlikely to dislodge the CCP from power.  Crisis events in Venezuela, Cuba, Iran, and even Maoist China, demonstrate dictatorships are very resilient to being overthrown from within. 

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Recent actions by Xi Jinping appear to indicate the CCP was expecting major financial difficulties within the Chinese real estate market and knew there was a serious risk that the Party might not contain the financial damage.  The CCP targeted specifically any and all industries that convey information, spread news, or perceptions of events to the Chinese population.  If this is the case, then the CCP is defaulting to the standard choice of totalitarians.  Rather than risk the loss of political power through economic reforms, these earlier policy actions indicate the CCP will instead tighten the reins to ensure no major political repercussions result from an economic disaster. 

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No matter what the Chinese state propaganda apparatus or its Western collaborators may say, the CCP lost domestic face and reputation after the COVID disaster in Wuhan.  Whether it was an accident or not, the CCP demonstrated incompetence as the contagion spread beyond provincial and national borders.  An economic disaster one year after a medical disaster could potentially cripple the CCP.  A crippled CCP is vulnerable to a future uprising, so the Party will do everything to prevent this possibility, even if it means the end of the globalist economic miracle of massive growth. 

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There is more. 

I have been posting on "ghost cities" in China for years.  They are filled with empty high rise apartments and offices.  It looks like that overbuilding will cause an economic collapse of at least one company and it could have a cascading effect on other big real estate operations.  It looks too big to hide at this point.