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How Worried Should The World Be About China’s Economy?
How bad is the macro situation in China?
It's a crucial question. For China, yes, but for the whole world too, and not just because China was a global economic linchpin in too many respects to quickly enumerate.
The Party derives much of its legitimacy from the continual improvement in the overall quality of life for the Chinese people. It's not exactly "consent of the governed," but the populace tolerates one-party authoritarianism in part because standards of living have steadily improved.
China is debt trapped. Only “painless” way out is state government forgiving local govn’t debt – which in of itself creates massive moral hazard issues… Expect more pain to come.
As for the social contract aspect, I agree to an extent however I wouldnt under estimate govern’t ability to iron fist itself out of public discontent. Take example from the economic reforms of the 1990s, massive state enterprise layoffs right after populous democracy protests few years earlier. Then many people thought the CCP was doomed and yet they’re still kicking around.
H, I have done a somewhat of a deep dive on China the past few months. The “eradication of extreme poverty” is CCP misinformation, mostly because of how it’s defined. You still have half the population, mostly rural, living in abject poverty, something like 2-300 yuan/month. The situation there is much more dire than most of us realize, and we know it is bad. Most Chinese money is held up in real estate, and we know that is collapsing, credit is drying up everywhere, FDI is dropping like a rock, China seems intent on making every regional country an enemy, the government is too inept to institute fiscal policy, and heck, the way the government is structured, there’s a huge incentive to hide problems instead of addressing them. Leaders don’t actually get the information they need to make the right decisions, which is evident by Xi seemingly only knowing about the spy balloon after being informed by the US. It’s a real mess there and I think slow collapse is most likely outcome.
Where is your source for this stats? Having personally lived in China for over 2 years recently I highly doubt your claim “half the population living off of 200 rmb per month”.
I still have many friends in HK with the means to leave (financial and foreign passports in the family) but choose not to. If life is so horrible in China, why do they stay?