2025-06-20

Communist China's excruciating slow-motion collapse

After zero-covid, Evergrande/Countrygarden collapse and Trump-Xi trade war, Communist China's EV industry implodes.

Workers control the means of production, Marxists said. Nope. Communist elite imposes huge losses on the workers while they buy property in Australia, New Zealand, UK, USA and even in their old enemy Japan.

China had barely recovered from zero-COVID excesses when the property market saddled with billions of debt started to collapsed. This was terrible because real estate is the biggest driver in the economy after the export-oriented manufacturing. Ordinary Chinese public is heavily invested in real estate. Chinese central government pumped billions of dollars and tried to save the situation but they could not prevent the collapse of real estate giants Evergrande and Countrygarden. Millions of investors in China and abroad (including the US Federal Reserve) lost their money.

The Trump-initiated US-China tarriff war has caused a collapse of manufacturing and exports. Entire cities have become ghost cities. No, not the ghost cities they purposely built from the ground up. These were big existing cities such as Beijing, Shenzen, Shanghai and Guangzhou that are looking forlorn. Factories are closed. Airports are empty. Malls are empty. Apartment blocks are empty. Streets are empty, except for suddenly impoverished people sleeping there. Ports are clogged with mountains of rusting shipping containers. Foreign exporters like Apple and Walmart are closing shop and moving to places like Vietnam and India.

Because of these series of mishaps, the central government has cut funds for local governments. The local governments have resorted to not paying employees. Even hospital workers have not been paid. The Chinese are panicking, as state-owned banks are refusing payments on treasury bonds.

A novel Chinese Communist innovation is to impose debt on everyone. Many government employees have become saddled with debt. Unpaid employees have been asked to take loans from banks to pay themselves salaries, on the promise that the loans can be paid back when the government eventually resumes paying their salaries. The old adage is true, even in Communist countries. Governments never go bankrupt. They push others into bankruptcy.

Now, it looks like the EV industry is collapsing. In order to show to the world that China's EV industry is world leading, the Communists offered local governments subsidies for disbursal to local EV manufacturers. The rush to corner the subsidies was so high that even the smartphone maker Xiomi is now an EV car manufacturer. Greedy local governments leaned heavily on EV dealerships to buy the vehicles themselves in order to boost sales figures. The last straw on the camel's back came when the largest EV maker BYD slashed prices and also started direct-to-consumer sales like Tesla. This lead to the sudden collapse of EV competitors and overloaded EV dealerships. Chairman of Great Wall Motor said the number of zero-milage used cars in the market has made it difficult to make new sales at reasonable prices.

While the economy is sinking, the Communist leadership is in turmoil. Eleven Jinpeng is purging anyone not considered as a loyalist. There have been many disappearances and trials in the party, civilian administratration and military.