China's Overprinting Fallout; Rumors Run Wild: Last Days Of The Dynasty?

CCP's overprinting of currency pushes Shanghai vegetable prices to match New York's. Foreign capital withdrawal accelerates. Beijing's dentai feng to close all locations. Top global private equity firms halt deals in China. Severe casualties in Jiancheng disaster zone. No rescue after a week of missing contact. Commentator, rumors often flourish in the final years of a dynasty. It's all covered in today's China Truths. CCP's overprinting of currency pushes Shanghai vegetable prices to match New York's. China's economic downturn is weighing heavily on daily life. Excessive money printing has driven inflation, pushing Shanghai's vegetable prices nearly on par with New York. Unemployment remains widespread, wage cuts are frequent, and housing values, vital to personal wealth, continue to slide. This pattern of shrinking incomes and rising costs shows no signs of easing. On the elite forum program of NTD Television, independent producer Li Jung noted steep rises in food prices across mainland China. Pork prices surged from 11.8 yuan, about US$1.66, per jean in January to over 20 yuan, about US$2.81, by August. The Ministry of Agriculture tracked a significant jump in with the average rising from 4.27 yuan to 6.01 yuan, about 0.6 to 84 cents, per kilogram between mid-June and mid-August, a decade high for this period. One jean is equal to 1.102 pounds. Former Shanghai official Yan Weiying noted on Elite Forum that vegetable prices in Shanghai have doubled, with cucumbers now costing 8 to 9 yuan, about US$1.26, and even basic items like green onions reaching 11 yuan, about US$1.54. Last year, a simple breakfast in Shanghai could cost 100 yuan, about US$14.04, while dining out for dinner typically runs 200 yuan, about US$28.09, per person. Despite the high living costs, the average income remains modest. While the official figure suggests over 12,000 yuan, around US$1,685, per month, most earn between 6,000 and 7,000 yuan, about US$938. Senior editor Shershan remarked that Shanghai's cost of living is now nearly on par with New York, including for basic items like vegetables, bread, coffee, and rent. This shift is alarming, as incomes in Shanghai still lag far behind those in the US, yet the prices have caught up. Shanghai housing prices dropped 34 percent, businesses closed down. On Elite Forum, Yan Weiying shared that Shanghai's severe economic decline. Since March 2024, housing prices have dropped by 34 percent, with listing volumes and foreclosure rates hitting record highs. Urgent sales have seen even steeper price cuts, driven largely by unemployment as people are forced to sell their homes to cover loans. Many bankrupt business owners are also contributing to this wave. Early in the pandemic, they took out loans using properties as collateral, but with the economy remaining weak, their properties are now being auctioned off. Yan also warned of a new property pension system in Shanghai, which she described as yet another blow to the housing market, calling it a disguised tax. Despite already paying property maintenance fees, residents are now being double-charged. Yan noted that whenever the government needs money, it could impose various fees, like labor fees or flood control fees, which are essentially illegal ways of extracting money from the public. The economic situation has led to widespread business closures. In 2022, Yan observed a Data shows that 12,000 businesses left Shanghai in the first half of this year alone, accounting for nearly half of the total 22,000 businesses that have relocated in the past five years, an alarming trend that doesn't even include companies that shut down entirely, as such figures are rarely reported by officials. Government-controlled economic model crisis deepens, leading to collapse. Adding more perspective, Guo Jun, editor-in-chief of The Epoch Times, stated that China's biggest economic problem is its local government debt, now exceeding 100 trillion yuan, about 14 trillion U.S. dollars. This year's special bonds can barely cover interest payments. China's economy is entirely controlled by administrative power, leaving fiscal policies unchecked and leading to massive debt. The government's solution, printing more money, has caused inflation and rising prices. Guo clarified that despite the Chinese government's claims of avoiding large-scale monetary stimulus, recent years have seen a flood of liquidity, with China's money supply increase surpassing the combined global total. This excessive money printing, intended to manage government debt, inevitably leads to inflation and rising prices. She believes that the recent price hikes in China are actually a direct result of this. However, according to her, there are two factors that have distorted these prices. First, a large portion of the excessive money supply has been absorbed by the black hole of real estate rather than reaching consumers. China's economic model, rooted in its planned economy legacy, prioritizes production over consumption, resulting in severe overcapacity and structural imbalances. The second issue is that price fluctuations from increased money supply spread from the center outwards. In China, the government and connected entities, especially financial institutions, benefit first, while the impact on general consumers comes later. The current rise in prices is a direct result of this delayed ripple effect. Guo Jun stated that while foreign experts suggest distributing money directly to consumers as a standard economic practice, this logic doesn't align with the CCP system, which focuses on a war economy where production capacity takes precedence over market price mechanisms. Only sufficient production capacity can sustain wartime needs. Guo recalled that in the 1970s, China's political economy courses emphasized that Japan's steel production of 10.8 million tons was enough to launch a war against China. In other words, production capacity determines war capability, not consumer capacity or price signals. So, what the top leadership of the CCP is concerned with is entirely different from what Western experts are proposing. She concluded, how long this economic crisis in China lasts depends on the CCP's resolve to go to war. Their stance on economic management hinges on when they decide to take military action against Taiwan and the scale of that conflict. If they're focused solely on resolving the current crisis, the CCP would have to initiate a significant shift in its economic model, relinquishing control and sharing the benefits. Even so, it would take more than a decade for recovery. But if they stick to the current government-controlled economic model, societal resources will continue to be misallocated. In other words, if the current approach persists, this economic crisis will deepen until it inevitably leads to complete collapse. I believe the CCP will maintain its administrative-driven model because they are gearing up for war. Foreign capital withdrawal accelerates, Beijing's Din Tai Fung to close all locations. Amid China's sluggish consumer market, well-known restaurant brand Din Tai Fung announced it will close 14 branches in multiple cities in China by October 31, laying off approximately 800 employees. In more detail, on August 26, Beijing Heng Tai Fung Catering Company Limited, which has operated in the mainland for nearly 20 years, stated that due to the expiration and non-renewal of its business license, all branches in Beijing, Tianjin, Qingdao, Xiamen, and Xi'an will cease operations. The company will handle employee compensation, member refunds, and other legal matters, with total costs estimated at 60 million yuan, about 8.43 million U.S. dollars. While branches in Shanghai, Guangzhou, and other cities continue normal operations, the non-renewal stems from shareholder disagreements, partly due to a poor post-pandemic business environment and China's dining industry. Wave of closures among mid-to-high-end restaurants. China's mid-to-high-end dining market has faced significant challenges and transformations in recent years. Since 2023, slowing economic growth, weak consumer spending, and fierce competition have led to the closure of numerous upscale restaurants. According to Channel News Asia, 1.36 million restaurants closed nationwide in 2023, with an additional 460,000 shutting down in the first quarter of 2024. Nearly 30,000 of these were high-end noodle shops, including the once-pioneering Ajisan Ramen. Ajisan Ramen's mid-year financial report shows an estimated net loss of around 20 million yuan about 2.8 million U.S. dollars, for the first half of this year, largely due to decreased foot traffic, which resulted in declining sales and losses for some stores. Experts point to the downturn in China's economy, widespread layoffs, business closures, and relocations to cheaper areas as primary factors behind this trend. These issues have driven vacancy rates in prime office districts to record highs. Data from the first quarter of 2024 reveals vacancy rates of 18.3% in Beijing, 15.77% in Shanghai, 18.4% in Guangzhou, and 27% in Shenzhen. Only a small segment of the population is still willing to pay premium prices. As a result, these high-priced restaurants and key business districts are drifting further away from their target white-collar customers. Growing foreign capital exit. As China's economic growth continues to slow, more multinational companies are scaling back their operations in the country. On August 26, IBM China confirmed to China Business News that it would completely shut down its research and development department in China, impacting over 1,000 employees. In May, SoftBank, once a key supporter of Chinese e-commerce giant Alibaba, sold nearly all of its shares in the company, bringing its stake down to almost zero. In July, Microsoft announced it would close all of its physical stores in China, shifting entirely to online sales channels. On August 21, Walmart, the world's largest retail giant, offloaded all of its shares in Chinese e-commerce giant JD.com, ending an eight-year investment. These developments suggest that foreign companies are becoming increasingly cautious in their approach to the Chinese market. Top global private equity firms halt deals in China. Another sector is China's securities market, where trading activity has sharply slowed this year. Amid escalating geopolitical tensions and Beijing's tightening control over businesses, top global private equity firms like Blackstone, Carlyle, and KKR are holding back on deals in China. According to the Financial Times, only five new investments have been made in China by the world's top 10 buyout firms this year, mostly small-scale. In comparison, three years ago, these firms completed 30 investments. By 2024, seven of these companies made no new investments in China, signaling a steep decline in foreign investor confidence. Rising interest rates have slowed global private equity deals, but the drop in China is more pronounced. Warburg Pincus, once highly active in China with major investments like Ant Group, has not made any deals there this year. Blackstone has also been inactive in China since 2021. Geopolitical risks and economic slowdown are making China a less attractive investment market. The U.S. is also tightening restrictions on investments in Chinese tech sectors, further dampening foreign interest. Experts note that China's unpredictable regulatory environment and slowing growth have turned what was once a gold rush into a cautious search for opportunities. Moreover, the frozen IPO market has left many Chinese fund managers struggling for profitable exit options, leading to fewer and less lucrative deals. Severe casualties in Jiancheng disaster zone, no rescue after a week of missing contact. Severe flooding has hit Jiancheng County in Eludio City, Liaoning Province, China. Several of the worst affected areas have been cut off from water, electricity, and the internet for a week. Mr. Liu, a civilian rescuer, described the situation, the water rushed in with extreme speed, bringing flash floods and mudslides. The affected areas are mountain valleys where narrow paths have turned into rivers, like coastlines. Elderly people who were sleeping were swept away in the muddy torrents. It's both a natural and man-made disaster, with severe shortages of supplies. Some places are so impoverished they have nothing left. They are in dire need, but no one is helping, and vehicles can't even get through. Ms. Han, from Hanton Village in Dayton Town, shared, there's a tailings dam nearby that overflowed, flooding everything. People had to climb onto their roofs. Houses were swept away in just a few moments, and within three to five minutes, people were gone. Cattle, sheep, and pigs were all swept away. After the water receded, nothing was left but mud inside the houses. We still don't have water, electricity, or the internet. On the evening of August 25, 2024, Matausi Village in Dayton Town finally regained a signal. A resident named Zhang recounted that everything was destroyed. Houses vanished, leaving no time to escape. People definitely died. It was like the end of the world. One family lost over 100 sheep, and fish farmers lost over a million fish. In my area, there are still 30 households without supplies. The well water is undrinkable, and it's been seven days since we've been able to bathe. Ms. Wang, a resident of Yishangfangzi Township, noted that this area of western Liaoning usually suffers from drought nine out of ten years. This year, the first half was plagued by severe drought, and they underestimated the reservoir discharge's impact, missing the chance to flee. Commentator, rumors often flourish in the final years of a dynasty. Over the past month, various rumors surrounding the CCP's leader have been circulating both within China and abroad, quickly spreading across social media. Despite the CCP's efforts to debunk these rumors by frequently showcasing the leader's public appearances, doubts have not subsided. So, why are these rumors flourishing at this time? Historically, the fall of every dynasty has been foreshadowed by certain signs, celestial omens such as plagues and other natural disasters, strange phenomena, as well as societal signals and widespread rumors. Take the Ming Dynasty, for example. Before its collapse, plagues swept the land one after another, and disasters struck in quick succession. The infamous Wang Gongchang explosion in Beijing is a striking example, where tens of thousands of houses were destroyed and over 20,000 people were killed, reduced to mere dust. Debris was flung into the sky, clothes were blown as far as Changping in Guangdong Province, and the dead were found naked. Uncanny events were widespread, the ground rumbled like thunder, black and red clouds appeared in the sky, and the statue at Confucius Temple in Sufu, Shandong Province, wept tears-like sweat for three days. Even the ancestral tomb of the Ming imperial family in Fengyang emitted mournful sounds for three years. Amid all these strange phenomena, the Ming Dynasty headed toward its downfall. Fast forward to present-day mainland China, where the past decade has witnessed an increasing frequency of disasters, droughts, floods, earthquakes, locust plagues, sandstorms, extreme heat, red tides, torrential rains, epidemics, and more, resulting in significant loss of life. Similarly, strange phenomena have been relentless, the simultaneous appearance of seven suns and two moons, large flocks of birds gathering in multiple regions, a black swan, seen as a bad omen in the west, suddenly landing in Tiananmen Square. Blood-red skies, rivers turning crimson, Venus intruding into the Taiwei enclosure, ground collapses, blood moons over disaster-stricken areas like Hebei and Xinmi in Henan, and even the reverse flow of the Jinxia River in the upper reaches of the Yangtze have been reported. The ancient Chinese believe that heaven reveals signs to predict good or bad fortune. The I Ching also asserts that celestial phenomena are expressions of divine will, reflecting human affairs. Historically, the ongoing disasters and strange phenomena occurring in mainland China today, especially the frequent appearance of unusual events, are all signals that the CCP's red regime is teetering on the brink, and its collapse could happen at any moment. Beyond celestial omens, all indicators of societal chaos signaling the CCP's downfall are fully present. Some netizens have drawn parallels with the social unrest before the Soviet Union's collapse, noting that leading up to its disintegration, nearly 200,000 violent incidents occurred annually, stability maintenance costs equal defense spending, young people were obsessed with government jobs and power, corruption was rampant with special privileges, GDP kept rising while living standards fell. In comparison, today's mainland China is even worse. Corruption runs rampant among CCP officials from top to bottom, just a village party secretary or school principal can embezzle billions, sparking massive public outrage. Under the CCP's oppressive rule, social hostility is severe, with resistance incidents happening constantly. The regime's only response has been to intensify stability maintenance, driving costs ever higher. Additionally, with foreign investments fleeing and private enterprises suppressed, unemployment has soared. Securing a stable government job has become the top priority for young graduates, as more and more people struggle under growing life pressures. It's clear that the current CCP regime mirrors all the warning signs observed before the collapse of the Soviet Union, and even goes beyond them, with additional factors like sharp population decline, entrenched social hierarchies, and rising taxes, all classic indicators of a regime nearing its end. Moreover, in the lead-up to the downfall of any dynasty, rumors often spread widely, typically serving as early prophecies. For instance, during the Qin Dynasty, Shouxian Ji, or In Search of the Supernatural in English, mentions a nursery rhyme from Changshui County, Blood at the City Gate, the city will sink into a lake. For audiences who may not be familiar, Shouxian Ji is a collection of Chinese stories compiled by Ganbao during the Qin Dynasty. This work contains various folklore, legends, and supernatural tales, many of which have been passed down through generations. Furthermore, Yi Yuan, a collection of strange tales and anecdotes compiled by Liu Jingxu during the Southern Song Dynasty in China, states, Qin Shihuang, cold and stiff, opens my door, sits on my bed, drinks my wine, spits in my broth, eats my meal as food, strings my bow to shoot at the eastern wall. When you reach Sheikyu, you'll perish. Great Shu will rise, and Qin Shing will be king. When the first emperor dies, the land will split. Before Liu Shou took power in the Eastern Han Dynasty, a popular nursery rhyme went, Harmony or discord, it's in the red brows. Victory or loss, it's in Hebei. Toward the end of the Sui Dynasty, a popular verse circulated, when poplar flowers fall, plum blossoms bloom, the plum's fruits rule the world. The plum bears fruit and unifies the realm, while the poplar's flowers are rootless and hollow. Sun and moon shine on the dragon boat, but the waters flow against it and whine on, sweeping away all the poplar blooms. The emperor's reign ends headless. Before Zhu Yuanzhang founded the Ming Dynasty, children sang, when the tower is black, northerners rule, southerners serve. When the tower turns red, those in red robes become the masters. In other words, according to commentator Zhou Xiaowei, this only occurs when a regime is nearing collapse. With the Chinese Communist Party losing public support and fracturing internally, these rumors gain widespread traction. As more people share them and more believe in them, some of these rumors start turning into predictions that are surprisingly accurate. The recent rumors circulating about the CCP leadership serve a similar purpose, hinting at an approaching regime change. Don't forget to leave a comment in the section below to share your opinions on today's topic with us. Make sure to like and subscribe to see more interesting topics from China Truths.