China Internal Disturbance Risk

[Garpal Gumnut]

Many commentators seem to view China as a homogenous hegemony when in fact it is subject to the same civil disruptions as all powerful empires and civilisations in the past.

It's peoples seem to be displaying "Melbourne-type" reactions to the anti-Covid measures in place atm. within it's borders. All empires have their day, particularly those with overly unctuous internal controls dripping from the top, much as the former USSR had, and the present Russia barely holds, over their far flung provinces.

A period of civil disorder may have two effects, one to hasten external conflict against Taiwan or secondly the top Chinese oligarchs of the CPC trying to continue the internal control of the CPC on the minions.

It is thus extremely difficult to assess the effects commercially for Australia and in particular the products of our quarry on which the XAO depends. It looks as if cattle and grain are in line for Chinese sanctions even without internal civil disturbance. The Chinese efforts seem to me to be over the top attempts to contain a coronavirus. Rather like trying to overtake a single axle Victorian plated caravan on a one bitumen lane bush track without damaging the paint on the Arnage or watching the visitors end a**e up in the scrub.

I do hope our major ASX listed companies have a plan B for when China either becomes more externally aggressive or descends in to internal disorder. It is very difficult to stop a billion people from catching a cold. I doubt if they will succeed. The constituent companies of the XAO need to be prepared.

gg

 

[sptrawler]

A very pertinent observation GG as usual, I may add, as I will passing by the resort soon and may need you to sign me in as a guest.

But as you say, the lockdowns, the sanctions and the Taiwan issue will be polarising in China, I'm sure they are not immune to outside news.
So they themselves would be asking, if the outside world is just learning to live with it and we in China aren't, why not?
That would then lead to the assumption that they either couldn't cope with an outbreak, as it would stretch their resources too much, or there is something to the theory that it is indeed manufactured.
Either way, it wouldn't be good for the Chinese Government.
So as you say, any outbreak of hostilities, could in fact backfire if the general public aren't committed to the cause.

 

[frugal.rock]

Having lived in China for around 1.4% of my lifetime, and Aus for 98.6% for the rest, the risk is minimal, IMHO.
Anyone over 45 years old who was in Beijing for Tiananmen Square massacre still remember things like bodies being bulldozed into piles for collection.

Internet censorship, social credit system, well established public and secret and government heirarchy channels and the COVID fear machine tied in with the subservient inherent nature of the people's, all have me "not greatly worried" about internal disturbance risk.
Anything that starts up is quashed quickly and swept under a rug, and then cleaned up asap under threat and duress.
Let's not kid ourselves.

https://www.bbc.com/news/world-asia-china-42465516

 

[JohnDe]

Many commentators seem to view China as a homogenous hegemony when in fact it is subject to the same civil disruptions as all powerful empires and civilisations in the past.

It's peoples seem to be displaying "Melbourne-type" reactions to the anti-Covid measures in place atm. within it's borders. All empires have their day, particularly those with overly unctuous internal controls dripping from the top, much as the former USSR had, and the present Russia barely holds, over their far flung provinces.

A period of civil disorder may have two effects, one to hasten external conflict against Taiwan or secondly the top Chinese oligarchs of the CPC trying to continue the internal control of the CPC on the minions.

It is thus extremely difficult to assess the effects commercially for Australia and in particular the products of our quarry on which the XAO depends. It looks as if cattle and grain are in line for Chinese sanctions even without internal civil disturbance. The Chinese efforts seem to me to be over the top attempts to contain a coronavirus. Rather like trying to overtake a single axle Victorian plated caravan on a one bitumen lane bush track without damaging the paint on the Arnage or watching the visitors end a**e up in the scrub.

I do hope our major ASX listed companies have a plan B for when China either becomes more externally aggressive or descends in to internal disorder. It is very difficult to stop a billion people from catching a cold. I doubt if they will succeed. The constituent companies of the XAO need to be prepared.

gg

China is not in a good place at the moment, its leaders may be looking at changing their bullying ways.

China’s ponzi-like property market is eroding faith in the state
Its meltdown could scarcely come at a worse time for Xi Jinping

The 120km train ride between the cities of Luoyang and Zhengzhou is a showcase of economic malaise and broken dreams. From the window endless, half-built residential towers pass one after another for the duration of the hour-long journey. Many of the buildings appear near completion; some are finished and have become homes to families. But many more are empty skeletons where construction ceased long ago. Developers have run out of cash and can no longer pay workers and buy materials. Projects have stalled. Families will never get their homes.


The train ride through China’s heartland helps to explain one of the country’s biggest crises in recent memory: the public’s loss of confidence in the government’s economic model. For decades the property industry has been symbolic of China’s unstoppable rise. Private entrepreneurs have made vast fortunes. Average people have witnessed their net worth soar as home values trebled. Local governments have filled their coffers by selling vast tracts of land to developers. An astonishing 70% of Chinese household wealth is now tied up in real estate.

To undermine trust in this model is to shake the foundations of China’s growth miracle. With sweeping covid-19 lockdowns and a crackdown on private entrepreneurs, this is happening on many fronts. But nowhere is it clearer than in the property industry, which makes up an estimated 25% of gdp. New project starts fell by 45% in July compared with a year ago, home sales by 33% and property investment by 12%. The effects are rippling through the economy, hitting furniture-makers and steelworkers alike. The blow to confidence comes at a critical time for Xi Jinping, China’s leader, who will probably be granted a third term at a party congress in October.

Reviving trust in the system is crucial for Mr Xi and the Communist Party. Yet the response from the government has been uncharacteristically disjointed and slow, with officials seemingly overawed by the complexity of the situation. To restore faith in the housing market, the public needs to see stalled projects completed and prices rise. Meanwhile, construction firms and their workers need to be reimbursed, and local and foreign investors to be paid back on their fixed-income products. And all this must be done without reinflating the unsustainable debt bubble that the property market has become.

Lines in the sand​

The housing crisis has two immediate causes. The first is a government crackdown on the excesses of the property industry. Since August 2020 officials have restricted developers’ ratios of liabilities to assets, net debt to equity and cash to short-term debt, in a policy known as the “three red lines”. This has forced many to stop unsustainable borrowing and sell down assets, severely limiting their ability to continue building and selling new projects.


China’s zero-covid policy is a second blow. The central government has forced dozens of cities to lock residents in their homes for days, and sometimes weeks, on end when covid cases are discovered. At the time of writing, the megacities of Chengdu and Shenzhen are fully or partly locked down. The shutdowns have stopped people from viewing homes and making purchases. They have also had an impact on the consumer psyche. Entrepreneurs fear the sudden closure of their businesses. Employees worry about being laid off. This sort of trepidation does not encourage homebuying.

The result is a crunch. China’s developers are highly reliant on selling homes long before they are built, so as to generate liquidity. Last year they pre-sold 90% of homes. But without access to bonds and loans, as banks reduce their exposure to the property sector, and with new sales now falling, the Ponzi-like nature of the property market has come into full view.

Evergrande, the world’s most indebted developer, defaulted in December. An effort to restructure its offshore debts, intended as a model to follow, missed an end-of-July deadline. At least 28 other property companies have missed payments to investors or gone into restructuring. Trading in the shares of 30 Hong Kong-listed developers, constituting 10% of the market by sales, has been frozen, according to Gavekal, a research firm. In early August half of China’s listed developers traded at a price-to-earnings ratio of less than 0.5, the level that Evergrande traded at four months before it defaulted, notes Song Houze of MacroPolo, a think-tank in Chicago.

Firms that just months ago were considered safe bets are now struggling. Take Country Garden, China’s biggest developer by sales. Earlier this year most analysts shrugged off concerns that it would come under pressure. Investors continued to buy its bonds. But on August 30th Country Garden revealed that profits for the first half of the year had fallen by almost 100%. The property market has “slid rapidly into severe depression”, it noted in its earnings. The strain on Country Garden indicates that problems are no longer specific to certain developers. The entire industry is at risk.

Potential homebuyers have dropped out of the market. Far more worrying, though, are the millions of people waiting, often for years, for homes for which they have already paid. Just 60% of homes that were pre-sold between 2013 and 2020 have been delivered.

Mr Liu, who has asked to be referred to by his family name, purchased a flat in Zhengzhou in 2014, making an initial 250,000 yuan ($40,000) down-payment. The home was scheduled for completion in 2017. But that day never came. Instead, he rented a flat, before eventually buying another one in an old building without an elevator. It is hardly the life he imagined for himself. Mr Liu never started paying his mortgage and has engaged in endless discussions with the property developer on getting back his down-payment. “There’s no use,” he says.

Analysts have been aware of these problems for years, but had believed that the Chinese authorities would not allow aggrieved homebuyers to protest. A report published two years ago by pwc, an accounting firm, noted that even when construction on housing projects stalls, “the hundreds or thousands of uncoordinated households normally have little ability to influence things”.

This calculation has been turned on its head. A small but influential movement to collect and publish data on the refusal to pay mortgages has taken the authorities by surprise. On July 12th anonymous volunteers began sharing data on mortgage boycotts on social media. So far about 350 have been identified; analysts believe this is probably a fraction of the true number. State censors have done their best to remove references to the explosive information, but knowledge of the protests appears to have spread nevertheless. As it does, others will be persuaded to delay purchases or halt mortgage payments.

Investors and potential homebuyers are now watching with unease as the state pieces together its response, at both central and local levels. For more than a decade Chinese cities have wielded a long list of rules and incentives to fine-tune local real-estate markets, usually to reduce speculation and cool rapid price rises. These included control over access to mortgages, as well as limits on who can buy homes and how many they can buy.

Cities are now loosening these rules. Between May and July municipal governments announced 304 individual measures to restore confidence, according to cicc, a Chinese investment bank. Zhengzhou, at the centre of the mortgage protests, was an early mover. In March it announced 18 actions in the hopes of stimulating demand. These included measures to make it easier to get mortgages, and to allow families with elderly members to buy flats if they move to the city.

These signals to buyers have attracted lots of attention—not because they have revived demand but because they seem to contradict central-government policy. In a video widely circulated on Chinese social media in August, a local Communist Party chief in Hunan province was seen calling on people to buy as many homes as possible: “Did you buy a third one? Then buy a fourth.” The message clashes with the one from Mr Xi himself, who has warned that “homes are for living in” and certainly not for speculative investment.

Local governments have also been encouraged by regulators and officials to create bail-out funds to invest in unfinished housing projects, and eventually to help deliver homes to frustrated buyers. Zhengzhou has allocated 80bn yuan ($12bn) to the cause. The thinking goes that local funds will be better suited to conditions on the ground.

Zhengzhou is experimenting with perhaps the most aggressive local plan yet. The city government has issued a directive to developers that says all stalled construction must restart by October 6th. Insolvent companies that cannot do so must file for restructuring in order to bring in new investment, and also repay any down-payments made by homebuyers such as Mr Liu. Failure to do so could result in developers being investigated for embezzlement and other serious crimes.

For their part, policymakers have repeatedly cut mortgage rates since mid-May. To guarantee the supply of homes, the central government has taken to fully guaranteeing new bond issuance by some private developers, effectively shifting the risk to the state. Longfor, a struggling property firm, priced a 1.5bn-yuan bond at a 3.3% coupon rate on August 26th, far below market pricing. This was possible solely because the bond was fully underwritten by China Bond Insurance, a state agency. More such issuance is planned in order to deliver liquidity to developers the government views as higher quality. It is the beginning of a programme to pick winners.

Another prong of state support is coming in the form of direct liquidity. On August 22nd the central bank and finance ministry said that they will back special loans from state-directed policy banks that can be provided to complete pre-sold homes. The size of the programme has not been disclosed, but Bloomberg, a news service, reported that 200bn yuan would be made available.

This sort of public spending is a double-edged sword. On the one hand, it will help deliver homes to rightful owners and restart mortgage payments, taking pressure off banks. But at the same time the cash is filling a hole created by bad local governance and dubious property developers. “That simply represents money that can’t be spent on stimulus elsewhere,” notes Alex Wolf of JPMorgan Chase, a bank.

Back to the drawing board​

Zhengzhou’s efforts to encourage new buyers since March have fallen flat. Instead, conditions have continued to deteriorate, suggesting that tinkering with local policies is not enough. Local bail-out funds also look flimsy. On paper several cities have hefty pots to spend, but they rely on local government financing firms that are themselves strapped for cash. Analysts are closely watching Zhengzhou’s attempt to restart all construction within a month, but many question if the funds needed for such a quick fix are available. The measures could unleash a wave of collapses among smaller developers, causing panic and financial turmoil.


Investors have put more hope in the central government, but so far its response has failed to match the scale of the crisis. The 200bn-yuan lending programme may account for just 10% of what is needed to complete all the country’s unfinished homes. About $5trn-worth of residential property has been pre-sold since 2020, reckons Mr Song of MacroPolo, making a bail-out of even a small portion of those homes incredibly costly.
The central government still has more levers to pull. Larry Hu of Macquarie, an investment bank, says a number of measures can be snapped into place. These include temporarily easing the “three red lines”’ policy, or vowing to act as a lender of last resort for all stalled housing projects. The latter, while expensive, is fully within the central government’s financial wherewithal.
The debate now focuses not on whether the central government can restore confidence, but on how far it is willing to go. The original crackdown on leverage was meant to punish companies that had taken on too much debt. A bigger bail-out will encourage more developers to ask for assistance in completing homes, pushing the government to subsidise yet more of the property sector, writes Allen Feng of Rhodium, a research firm: “quite the opposite of what was intended with the ‘three red lines’”.
The campaign against leverage was also meant to bring the property sector more in line with demand over the next decade. Officials have long acknowledged that developers were selling far too many homes. About 70% of those sold since 2018 were purchased by people who already owned one, estimates JPMorgan. Restricting debt levels was supposed to force firms to adjust to actual demand.
That demand is likely to fall as China’s population growth slows. Home sales reached 1.57bn square metres in 2021, more than twice as high as in 2007. But Chen Long of Plenum, another research firm, projects that real annual demand will fall to 0.88bn-1.36bn square metres over the next decade, as the demographic shift takes hold and urbanisation slows. Reinflating the market means propping up the bubble.

The government’s balancing act is fraught with risk. In mid-October the party congress will take place as major cities lock down. Mortgage boycotts will rumble on, and possibly grow larger still. Overall confidence in China’s economic foundations could cross a threshold beyond which it becomes far more difficult to recover. All this means that Mr Xi’s third term will start in inauspicious circumstances.

Australia rejects China’s requests to join trans-Pacific trade partnership​

Australia has rebuffed Chinese requests to commence negotiations on the country’s bid to join one of the world’s biggest free-trade agreements amid deep concerns over its suitability for admission given its track record of economic coercion.

Chinese Ambassador to Australia Xiao Qian said Beijing wanted to urgently start negotiations on its admission to the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

“We’ve been asking for an early start, but there’s no clear confirmative response from the Australian government yet,” Mr Xiao told The Australian.

“The end of the year is too late.”

China must get the agreement of every CPTPP member, including Australia, to join the trade deal, which requires members to strictly adhere with World Trade Organisation rules.

Former prime minister Scott Morrison said prior to the last election that China would have little chance of gaining entry to the bloc following its campaign of trade coercion against Australia.

Mr Xiao declined to comment on China’s prospects of gaining entry to the agreement, given its use of trade as a weapon against countries like Australia.

“As for the details … both sides need to sit down and talk about those differences,” he said.

“We also need a mutual kind of action towards each other.”

Mr Xiao earlier told a meeting of the Australia China Business Council in Canberra on Wednesday that he remained hopeful the two sides could come to an agreement.

“We are looking forward to an early possible response from an Australian government for us to start the negotiations to explore how we can work on this together to the benefits of our two countries and the region as well,” he said.

Australia’s Ambassador to China Graham Fletcher also spoke at the event, saying there had been a “more measured and constructive” tone from China towards Australia since the election of the Albanese government, which has sought to end “megaphone diplomacy” with Beijing.

But he said beyond meetings between the nations’ foreign affairs and defence ministers, the relationship remained a difficult one.

“The embassy’s access into the Chinese system has also improved slightly, but not much beyond that,” Mr Fletcher said.

“There has been no alteration to the measures affecting Australia’s exports. We remain patient and ready to engage with China across a broad agenda.”


Australia’s Ambassador to China Graham Fletcher says the China-Australia relationship remains difficult.

The ambassador, who is back in Australia for mid-term consultations including talks with Foreign Affairs Minister Penny Wong, said the countries were “in something of a negotiation process to find viable parameters within which two quite different countries can interact and get along without disagreements that prevent that”.

Mr Fletcher said the embassy’s analysis was that Chinese growth was likely to come in well below expectations at “about 3 per cent”, compared to an average of more than 5 per cent in recent times.

He said the Australian government also believed Chinas’s property sector would have a soft landing, contrary to what he described as “alarmist press reporting”.

“This is going to be a difficult process but the important thing is we consider there a sufficient capacity in the financial sector to absorb these costs as the sector deleverages,” Mr Fletcher said.

BEN PACKHAM​

FOREIGN AFFAIRS AND DEFENCE CORRESPONDENT

 

[Dona Ferentes]

a rapidly slowing economy ... and one of the few countries (Japan being the other) not in the current super- aggressive (some say co-ordinated) tightening in global monetary policy

 

[Garpal Gumnut]

The Formosa section of the China desk here at the hotel has been on Flight Radar 24 all night.

No flights overflying China.

Rumours of my previous concerns re young Xi are rife.

Reports are that Qu Jum Ping has already taken over at the top of the CCP.

gg

 

[Knobby22]

The Formosa section of the China desk here at the hotel has been on Flight Radar 24 all night.

No flights overflying China.

Rumours of my previous concerns re young Xi are rife.

Reports are that Qu Jum Ping has already taken over at the top of the CCP.

gg

That would be good news.

 

[divs4ever]

That would be good news.

would it ??

Xi wasn't allowed to run China as a fiefdom

 

[Knobby22]

would it ??

Xi wasn't allowed to run China as a fiefdom

But wouldn't a reset be a good thing? And breaking the constitution so Xi could effectively be a dictator would not be.

 

[divs4ever]

But wouldn't a reset be a good thing? And breaking the constitution so Xi could effectively be a dictator would not be.

but history shows there is a bigger chance of a worse dictator replacing the previous one ( plenty of examples of that )

remember how they replaced that 'evil Trump ' how is that working

wait until you get an unelected EU-centric world government that will even micro-manage your food intake

 

[frugal.rock]

I must admit that I feel most sorry for people like me.

gg

The Formosa section of the China desk here at the hotel has been on Flight Radar 24 all night.

No flights overflying China.

Rumours of my previous concerns re young Xi are rife.

Reports are that Qu Jum Ping has already taken over at the top of the CCP.

gg

It's all just a big fat old rumour, confirmed by my source's.

Next.

 

[Dona Ferentes]

It's all just a big fat old rumour, confirmed by my sources.

Next.

Correct.

 

[Dona Ferentes]

Was it an inscrutable historical eminence or just an ABC reporter that stated:
"When the centre is strong, the provinces are strong (quiescent),
When the centre is weak, the provinces are weak (fractious).?

 

[waterbottle]

This is making the rounds on Reddit

Xi Jinping trends online amid coup rumors, canceled flights

Unsubstantiated claims spread on social media that the Chinese president is under house arrest, although the reports have been dismissed as "wild rumors."

www.newsweek.com

 

[frugal.rock]

Was it an inscrutable historical eminence or just an ABC reporter that stated:
"When the centre is strong, the provinces are strong (quiescent),
When the centre is weak, the provinces are weak (fractious).?

CONSTITUENT ASSEMBLY OF INDIA - VOLUME VII Tuesday, the 9th November, 1948 The Constituent Assembly of India met in the Constitution Hall, New Delhi, at Ten of the Clock, Mr. Vice-President (Dr. H. C. Mookherjee) in the Chair.

Shri R. Sankar (Travancore) speaking at the Constituent Assembly Debates On 9 November, 1948.

"With regard to other matters, we must borrow a lesson from the Australian and Canadian Constitutions where the provinces and Centre have evolved a sort of relationship which is still the bone of contention in their law courts.The recent instance in Australia where Nationalisation of Banking was attempted is an example: the Centre wanted to nationalise the banks but the provinces resisted. So also in our future development, the relationship between the provinces and the Centre has to be evolved in the best interests of the country. We require no doubt a strong Centre, but a strong Centre should not mean weak provinces.The provinces also should be equally strong to enable them to perform their multifarious duties and to develop schemes.They should be left with sufficient financial resources to discharge their duties and contribute to the strength of the Centre."
?

 

[Knobby22]

Rumours of a coup doesn't seem to be true e.g. no flights cancelled. Just wishful thinking.

Fact Check: Is China Having A Coup And Is Xi Jinping Under House Arrest? Here's What We Know

Rumours of a coup against Chinese President Xi Jinping are going around on social media, but experts have highlighted that there is no concrete evidence of coup or any disturbance in China so far.

www.outlookindia.com

 

[JohnDe]

Xi Jinping and the party have aspirations of recreating a world order in the format of the China communist political system. They see that the time is near, the Western system weakened by too much freedom causing disunity.

How to make sense of Xi Jinping, China’s enigmatic rule.

His project to restore the Communist Party’s overbearing role has grim implications for China and the world

Xi jinping was 31 when he arrived in Iowa in 1985. A junior Communist Party official at the time, he was on a two-week tour to learn about animal feed. His hosts liked him and he liked them. The highlight of his trip was a two-night stay with families in the small town of Muscatine. Mr Xi slept in a room decorated with posters from “Star Trek” and “Star Wars”. He tried popcorn for the first time. By all accounts, he loved Iowa.

Embroidered stories like this led many observers to be optimistic in 2012, when Mr Xi became China’s leader. His father was a revolutionary pioneer, who later backed economic opening and reform as a provincial boss. Mr Xi grew up as a “princeling”, a child of party royalty. Some guessed he would follow in his father’s pragmatic footsteps. But he has taken a different path.

Far from being a reformer, Mr Xi sees himself as a restorer—of the party and its central role in society, and of China and its role in the world. He has amassed more power and wielded it more ruthlessly than any Chinese leader since Mao Zedong. As his power has grown, so has China’s ambition. At the party’s five-yearly congress, starting on October 16th, Mr Xi will almost certainly be given another term as supreme leader, possibly setting him up as ruler for life. Understanding his origins and his beliefs has never been more important.

That is the aim of our eight-part podcast series, “The Prince”, and of this week’s Briefing. In dozens of interviews, people who have studied Mr Xi up close and from afar explained to us what motivates him. The result is a portrait of an enigmatic man whose plans hold troubling implications for China and the world alike.

The heart of Mr Xi’s plan is to restore the Communist Party, which had faded from the lives of many people. He came of age in the Cultural Revolution, when Mao upended society by mobilising the Red Guards to attack intellectuals and officials deemed insufficiently loyal. Mr Xi’s father was tortured. His half-sister took her own life. Mr Xi was sent to live in a cave in the countryside for seven years to learn the virtues of hard work.

According to party mythology, the experience transformed Mr Xi from an entitled princeling into a man of the people. A source quoted in an American diplomatic cable saw it another way: Mr Xi survived “by becoming redder than red”. Rather than reject the party after Mao’s purges, he dedicated himself to restoring it. The party, to his mind, was the only institution able to prevent such chaos from recurring. So it made sense for its leaders to turn to him in 2012, when many thought the party had again lost its way. To save it, they believed, it needed discipline and a renewed sense of purpose.

China’s president has given it that in spades. His anti-corruption campaign set a new tone—and doubled as a purge of his rivals. He has since reinjected the party into all aspects of life. Party committees have been set up in private firms and reinvigorated at the neighbourhood level, where grassroots members help enforce his “zero-covid” policy. Mr Xi has created party bodies with new powers to oversee government ministries. As he says, “Government, the army, society and schools, east, west, south, north and centre—the party leads them all.”

Mr Xi wants to restore China, too. In 2018 a new revelation of the president’s philosophy laid out ten principles for diplomats to follow. Top of the list was maintaining the authority of the party. Second was “realising the rejuvenation of the Chinese nation”. Whereas Mao united the country and Deng Xiaoping helped it prosper, Mr Xi believes he will be the one to make it great again. He talks of a West that is in decline and of the world experiencing “great changes unseen in a century”. The phrase has roots in the late Qing era, when China was humiliated by foreign powers. Mr Xi has turned it on its head.

There is nothing odd about a big power wanting a big say in global affairs. But China’s regime sees today’s world order as a Western imposition, and wants to rewrite the rules. “The Chinese people will never allow any foreign forces to bully, oppress or enslave us,” he said last year, marking the centenary of the party’s founding. “Anyone who dares to try to do that will have their heads bashed bloody against the Great Wall of Steel forged from the flesh and blood of over 1.4bn Chinese people.”

That is music to the ears of nationalists, who revere Mr Xi and revile foreign critics. Many of them believe the West is racist and self-centred. Their hubris, paranoia and frustration are a combustible mix. In August, when America’s Speaker of the House of Representatives, Nancy Pelosi, visited Taiwan, nationalists called for her plane to be shot down. They believe America and a growing nato alliance provoked Russia’s invasion of Ukraine, which Mr Xi tacitly backs as a challenge to the West. Today’s China reminds some Western diplomats of Japan in the 1920s and 1930s.

The contest between China and the West is, above all, one between competing philosophies. Western governments believe success comes from letting people choose their own destiny. China’s rulers believe that individuals must sacrifice their liberties, privacy and dignity for the greater good—as defined by the party. Mr Xi espouses a maximalist version of this. Lately it has not been going well. Under the fuzzy banner of “common prosperity”, he has reasserted state control over the economy and hobbled some of China’s most successful firms. His plan to tame the property market lies in tatters and bad loans weigh perilously on the economy. Another pressing problem is his zero-covid policy. To keep most of China virus-free, officials impose draconian lockdowns on huge areas with tiny outbreaks. At first that saved many lives, but it has now become yet another drag on output. Fed up with the rules, people have begun to flout them.

Restoration tragedy​

When Mr Xi took over in 2012, China was changing fast. The middle class was growing, private firms were booming and citizens were connecting on social media. A different leader might have seen these as opportunities. Mr Xi saw only threats. At home he is assembling a high-tech apparatus of incentives and coercion designed to restore party control. Abroad, he is posing a challenge to the American-led order that the world should resist. ■

The Prince from Economist Podcasts+

Uncover the real story of China’s leader and his rise to the top in this eight-episode series podcast.

www.economist.com

 

[noirua]

 

[waterbottle]

Hu dragged out

 

[frugal.rock]

Hu dragged out

Former President before Xi.

I hope it signals to everyone the complete and utter total control the upper echelons of the CCP have over the whole country.

Stay well away from even getting close to toeing the line and continuously kowtow, or you get disappeared in a blink of an eye.

For the sake of friends and family and colleagues, Hu will be telling them "he didn't feel well" and "asked them to accompany him out". I won't be surprised to hear he passed away within 6 month's from now