As the Chinese Economy was doing badly in the summer, some people predicted housing prices would collapse by the end of the year: it finally did.
Some Shanghaineses were selling their houses in the best location with quite a big discount, but for 45 days, no one came to look at them. The real estate agents told them for the second half of the year, they have not had one buyer.
Beijing housing price has never fallen, so when the price started to fall there, it became huge news, a fall of 18% on a development project was reported. On second-hand market, the offer price is usually 1 or 2 million below the asking price (also in the 10-20% range).
Some reported an almost 70% price fall in Shenzhen.
Moody has announced the downgrade of China’s credit from stable to negative, and as it prepared for reactions from the Chinese government, it advised its employees to work from home.
Fifteen days after the social media anecdotes on falling housing prices, Financial Times reported: Sliding Beijing home prices spur alarm in China’s property sector.
But is the Chinese Economy doing really badly?
Some argued that it depends on the point of view: from the government’s perspective it is doing fantastic.
In early December, Politico reported: China’s Xi goes full Stalin with purge, which claimed that the ex-foreign minister Qin Gang was implicated in an intelligence leak to the USA about the “Rocket Forces” of PLA. At the same time Qin disappeared, several high-level commanders of the Rocket Forces also disappeared, at least one was announced dead. The same article also reported that Mr. Qin might have died of suicide or torture in late July.
Chinese Twitter circle erupted in disbelief. Maybe we will know many years later how good the Politico report was.
A few days later, Asia Sentinel also reported: At least 70 arrested in China Rocket Force Scandal, and alleging that Putin had tipped Xi the intelligence in March when Xi visited Moscow, and Mr. Qin might have been executed.
And China got a new Defense minister, Dong Jun:
Before becoming the People’s Liberation Army Navy chief and made a full general in 2021, he was vice commander of the East Sea Fleet, the backbone of what is now the Eastern Theatre Command - the main force responsible for fighting over Taiwan, a self-ruled island China considers its own.
He also served as vice commander of the Southern Theatre Command which operates in the South China Sea, most of which is claimed by China.
“Dong would be familiar with managing near-encounters between Chinese and U.S. military. This is useful when he has to manage crises between both militaries,” said Li Mingjiang, international relations scholar at the Rajaratnam School of International Studies in Singapore.
On Dec 10th, Chinese Navy attacked Philippine fishing boats,
China’s ships, which have surrounded the Philippine-occupied Second Thomas Shoal for years, have blocked the Philippine coast guard and supply boats in a years-long effort to take control of the hotly disputed atoll claimed by both nations.
It’s also claimed by Taiwan and Vietnam.
The hostilities, which have been particularly heated this year, have stoked fears of an armed conflict that could involve the United States, which has vowed to defend the Philippines, its treaty ally, if Filipino forces come under armed attack.
China seems to be very confident in its military power and eager to use it to make a statement now. It certainly has made the USA hands full.
Back in November, Xi and Biden have discussed the China’s military plan to take Taiwan. Per a NBC recent report,
Chinese President Xi Jinping bluntly told President Joe Biden during their recent summit in San Francisco that Beijing will reunify Taiwan with mainland China but that the timing has not yet been decided, according to three current and former U.S. officials.
Xi told Biden in a group meeting attended by a dozen American and Chinese officials that China’s preference is to take Taiwan peacefully, not by force, the officials said.
The Chinese leader also referenced public predictions by U.S. military leaders who say that Xi plans to take Taiwan in 2025 or 2027, telling Biden that they were wrong because he has not set a time frame, according to the two current and one former official briefed on the meeting.
People who are not familiar of CCP’s long-standing attitude on Taiwan thought that Xi was telling Biden that China will invade Taiwan, while other China watchers reminded everyone that this has been China’s rhetoric all along, there is nothing to see.
Meanwhile, NYT reported: China Quietly Rebuilds Secretive Base for Nuclear Tests.
So, is China going to attack Taiwan or not? It might depend on the result of the Taiwanese January election. It also might depend on which war is easier to win - the war on the contested waters with the Philippines, or the war on Taiwan. It seems that Xi needs a war, when domestic economic pressure is worsening, which broods discontent.
Five years ago, an anonymous writer Youwei wrote an article for Foreign Affairs “The End of Reform in China”. The author described the “ideological deadlock” of Chinese reform:
The so-called socialist market economy principle has guided China for over 30 years, allowing for both continuity and reform. It has always contained something of an internal contradiction, because the impersonal legal system required by the market economy could potentially compete with the personalized party leadership as the final arbiter of public affairs, and in recent years, the question has come to the fore with greater urgency: Which is more important, the needs of the market economy or those of the Communist Party?
He then described four possible futures for China, and the most likely one is that Xi did not try any reform and eventually:
A housing bubble, manufacturing overcapacity, financial instability, weak domestic demand, and widening inequality represent significant vulnerabilities. The bursting of the housing bubble, for example, could cause problems throughout the economy and then in the political sector, too, as local governments lost a major fiscal source that they rely on to support public services and domestic security.
With the housing bubble that is unraveling right now, the author’s prediction might become true right now. Then what?
This could trigger the third possible future: democratization through a crisis. Such an outcome would not be pretty. With the country’s economy damaged and political demands soaring, conflicts could intensify rather than subside, and several time bombs planted by the current regime (a demographic crisis, environmental devastation, ethnic tensions) could eventually explode, making matters worse. The result might be the reemergence of some form of authoritarianism as the country recoiled from democratic disorder.
This reemergence, thanks to COVID, seems to have happened also.
Xi has amassed all the power and authoritarianism in China is as bad as Mao at the end of the cultural revolution. Xi recreated Mao’s political system in which everyone in power got the power because of him, yet he could not trust anyone. The fiasco of the defence minister and foreign minister had a chilling effect on people who work for Xi.
How likely Xi will use a war, with the Philippines or Taiwan, to shore up his support from the people amid economic hardship for many people, is everyone’s guess.
Chances are that you have tried egg fried rice in your life by now. It is such a popular Asian dish! But in China, it has a very different meaning. That you will quickly learned when joining Chinese social media.
Mao had a son that he was grooming to be his political heir. His name is Mao Anying:
Mao Anying (Chinese: 毛岸英; pinyin: Máo Ànyīng; 24 October 1922 – 25 November 1950) was a Chinese military officer. He was the eldest son of Mao Zedong and Yang Kaihui. Educated in Moscow and a veteran of multiple wars, Mao was killed in action by an air strike during the Korean War.
Here is the history part of the event, according to Wikipedia:
In June 1950, Mao (Anying) requested to join the Chinese People’s Volunteer Army (PVA) as an officer in the Korean War. PVA commander Peng Dehuai and other high-ranking officers, fearing Mao Zedong’s reaction if his favourite son was to be killed in combat, had long opposed allowing Mao to join the PVA and tried to prevent him from entering. Mao Zedong overrode Peng, who allegedly shouted, “He is Mao Zedong’s son. Why should it be anything else?” Peng instead had Mao assigned to himself as his secretary and Russian translator, under the pseudonym “Secretary Liu” at the PVA headquarters, located in caves near an old gold mining settlement in Tongchang County. This location offered excellent protection from United Nations air attacks and was far from the front lines of the war. However, the safety was an illusion, as the US Air Force completely controlled the airspace.
On the evening of 24 November, two UN aircraft, P-61s on a photo reconnaissance mission, were seen overhead. According to multiple Chinese eyewitnesses, sometime between 10:00 am and noon on 25 November, four Douglas B-26 Invaders dropped napalm bombs in the area. One of the bombs destroyed a makeshift building near the caves, killing Mao and another officer, Gao Ruixin. Several conflicting reasons have been given as to why Mao was in the building, including suggestions that he was cooking food during daylight, in violation of Chinese Army regulations, fetching documents, or sleeping late due to night duties, which had led to him missing breakfast. Another reason given was that due to the high amount of communications, being the PVA headquarters, the Americans were able to combine aerial reconnaissance with the direction of radio waves, to identify its location.
You can rightfully ask here: seriously, what food was he cooking?
And the answer is… egg fried rice!
Peng witnessed the explosion nearby and, realizing Mao was in danger, tried to run towards him but was physically restrained by his guards. Peng screamed, “if you don’t let go, I’ll kill you!” to which the guard responded, “if you kill me, I still won’t let go”. Mao’s body was reportedly burnt beyond recognition and was only identifiable through a Soviet watch given to him by Joseph Stalin. Peng immediately reported Mao’s death to the Central Military Commission, but Zhou Enlai, Liu Shaoqi, and Yang Shangkun ordered the CMC and Politburo not to inform Mao Zedong. Only in January 1951, when Mao Zedong asked his personal secretary Ye Zilong to have Mao transferred back to China, Ye informed him of the news. Mao had been buried in Pyongyang, in the Cemetery for the Heroes of the Chinese People’s Volunteer Army.
During the Cultural Revolution, Peng was persecuted and sentenced to life imprisonment, and he died in prison in 1974. Many believed that his fate was sealed when Mao Anying died on his watch.
For quite a long while, Chinese people considered themselves lucky that we escaped the misfortune of North Korean people because of the egg fried rice (which had Mao’s heir killed). Eating Egg Fried Rice in late November started to become our Thanksgiving.
How popular this tradition has become? We don’t know. Because there are also many Mao worshippers in China.
For example, one famous chef, Wang Gang, did not know this new tradition. Somehow his team put a video of him instructing his fans how to make the best egg friend rice on November 27th.
Very quickly, Wang learned of the tradition, and he was quick to issue an apology video:
Here I am making two promises to everyone. First, all my videos will be personally uploaded by me. Second, as a chef, I will never make egg fried rice and will never make videos on making egg fried rice.
Why? The general public had no idea. And if they search Egg fried rice, they get Mao Anying instead. Just imagine how confused they have to be if they do not know the food Mao Anying was making that fatal morning.
Under such public confusion, chef Wang Gang had to delete the apology video.
He had not released anything since the Egg Fried Rice fiasco, and on Dec 29th, some online user found out that Wang Gang has been shadow banned on multiple platforms