China's Economic Downward Spiral Continues Apace

China's in trouble. They have for some time now been facing the inevitable pop of their real estate bubble, and it looks to be happening now. China, being a communist country, reacted as communist and socialist regimes always do—by throwing more money at the problem. As is always the case, it's not working.

Markets in China sank Friday despite a fresh flurry of measures to help prop up the ailing property sector, as the International Monetary Fund forecast that the Chinese economy will continue to slow in coming years.
The report by the IMF forecast that the economy would expand at a 4.6% annual pace this year, down from 5.2% in 2023. It put growth in 2028 at 3.4%. It noted that housing starts had fallen more than 60% from pre-pandemic levels after a crackdown on excessive borrowing that began in 2020.
That’s a pace “only seen in the largest housing busts in cross-country experience in the last three decades,” it said.
Shanghai’s benchmark composite index lost 1.5%, dipping sharply at one point before regaining some losses but still logging its worst week in five years. The smaller market in Shenzhen lost 3%.

This comes on the heels of the ordered liquidation of one of China's largest real-estate development outfits.

The real estate industry’s woes were highlighted earlier this week by an order by a Hong Kong court for the liquidation of China Evergrande, the world’s most heavily indebted developer with more than $300 billion in liabilities.
China’s property sector accounts for nearly a third of the country’s economic activity and the industry-wide meltdown has weighed on growth and sapped the confidence of both investors and consumers.

China is in a lot of trouble. Not only is their economy slipping, as communist command economies always inevitably do, but they are also falling off a demographic cliff. The One Child policy was an utter disaster, having produced a couple of generations of babies who are now young men with no prospects of finding wives—and the Chinese couples that are together aren't reproducing.

None of this has stopped China's expansionist goals.

It's not just the real estate market that's a mess in China. YouTube vlogger serpentza, who lived in China for many years and maintains contacts in the Middle Kingdom, recently presented some compelling evidence of China's painful economic woes.

Somehow, though, the Chinese government—by which I mean the Chinese Communist Party (CCP)—has enough money to spend on other, less vital matters.

China's a mess. It's easy to lay the blame at the feet of communism, and frankly, that's where a lot of the blame belongs. But their demographic problems, which are shared by Japan and most of Europe, may present a greater danger; a couple of generations of frustrated young men with no prospects for wives, all of them loaded with the frustrations that problem comes with, is a recipe for social unrest.

The CCP suffers from the same fault as the Bourbons of France; they are arrogant in their right to rule while having very little idea as to how to make any substantive improvements in the lives of their subjects. (Sound familiar?) In 2023, while the average annual household income in urban households was roughly 50,000 yuan ($6,900), urban households are still living at the subsistence level, with an average annual household income of a bit under 22,000 yuan ($3,066.) That, too, is a recipe for unrest.

Add to all that the fact that the CCP seems not too worried about the quality of life of the average Chinese.

China is a country with an increasingly precarious economy, expansionist ambitions, and a lot of frustrated, angry young men. It may be that China can address all these problems peacefully, but I'll be damned if I can see how.