China may not be quite the ascendant dragon we fear it is

I believe, as Trump does, that China is our major geopolitical enemy.  It's co-opted our entire manufacturing sector, including manufacturing things on which we're completely dependent, everything from life-saving drugs to computer technology to the solar panels being forced upon us to coffee makers.  (China's manufacturing sector is unconstrained by climate change concerns.)  China's used its belt-and-road initiative to take over ports and other infrastructure in third-world (and even poor European) countries.  And, with its container vessels everywhere, we can only hope they're not armed with missiles, nuclear or otherwise.  But underneath that aggressively displayed power, China has a lot of structural problems.

The world recently got a glimpse of one of those structural problems when footage emerged of tanks protecting the Bank of China lest citizens with their savings trapped in the bank try to make a run on it:

Even the Biden administration, with its Orwellian redefinitions, would be hard put to spin that into a sign of a healthy economy.

Even the Biden administration, with its Orwellian redefinitions, would be hard-put to spin that into a sign of a healthy economy.

London's Sunday Times has now published an article detailing the systemic problems with China's economy.  For example, did you know there was a mortgage boycott in China?

Tens of thousands of homebuyers are withholding mortgage payments on their unfinished homes, fearing their money is being stolen by property developers.

The mortgage strike is snowballing and has reached more than 100 cities. Nine out of ten new properties in China are sold before they are finished, and advance payments are a lifeline for developers and banks. The Chinese Communist Party (CCP) is rattled and attempting to erase news of the protest from social media to stop the strikers organising.

The article also points out that, if it weren't for COVID saving China's economy by trashing the rest of the world's economy, China's GDP has been in a continuous state of collapse since its peak in 2005.  The CCP promised that it could deliver both communism and prosperity, but it's failing on that last metric.

The main problem is that China is overextended with housing.  We've all heard about the ghost towns that were built and remain empty.  The Times says China is estimated to have 65 million vacant units.  Housing was what drove China's economy, and that market is collapsing.  Think of our 2008 housing collapse and multiply it by the fact that an estimated one third of the Chinese economy is based on housing.  None of this is helped by the fact that China's one-child policy was so effective that the population is rapidly shrinking and aging.

Image: Xi Jinping (edited).  YouTube screen grab.

China's belt-and-road system is also collapsing.  Sure, when those countries in which it built ports and dams couldn't pay China back for the work done, China ended up owning those assets.  It turns out, though, that owning a port in a third-world, bankrupt country isn't quite the asset China thought it would be.

This is always the problem with late-stage totalitarian systems.  Superficially, they're blowing themselves up like pufferfish to look ever bigger and more threatening.  However, underneath that fierce exterior — a system predicated not on the dynamism of the free market, but on the slow, corrupt motion of an oversized government — everything is running at peak in-efficiency.  Other people's money is long gone; the government cannot afford to continue propping up a dysfunctional industrial sector, and the nation, like a franchise that grows too fast, is overextended to the point of collapse.

I strongly believe that China continues to be a grave threat to us.  As we know, there's nothing more dangerous than a trapped animal fighting to save itself from what it believes is imminent death.  The same holds true for despotic governments.  Indeed, even as China may have passed its peak power, it's probably more dangerous than ever — especially because it owns the man in the White House (whether because it bought off both Joe and Hunter or because it has videos that the Bidens cannot have exposed).

No wonder, then, that when China threatened to blow Nancy's plane out of the sky, the White House didn't call its bluff.  Nancy just took Taiwan off her itinerary.  Pelosi may yet sneak into China, but, for now, it looks as if the aging Asian tiger totally intimidated the corrupt, aging, demented American paper lion.

UPDATE: The latest report is that Nancy Pelosi will visit Taiwan.  If that proves to be the case, both she and the Biden administration are doing the right thing.  Of course, having a conspiratorial turn of mind, now that Tom Cotton is saying it was Biden who leaked the trip, I'm wondering if this wasn't all an elaborate and pre-planned Kabuki ritual to make it look as though Biden is standing up to a foreign country that owns him. 

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