From Evergrande to BYD: Is China’s EV Dream Crashing?

Hi everyone, welcome to Lays Real Talk. All right, it's Tuesday. Well, let's set the CCP politics aside for now. Today, we'll focusing uh we're focusing on China's EV industry and its leader, BYD, aka the Tesla killer. While the EV sector is one of Xiinping's designated strategic industries, MBYD has been one of its flagship companies, receiving extensive state support. It is meant to push China to the forefront of global high-tech manufacturing. But much like China's real estate sector, its EV industry is now teetering on the edge. All right. I hope I hope I sound okay. People like my new microphone, it seems. Yeah. Okay. All right. So, the real estate sector was tied to local government. The EV industry is heavily driven by by the central government. And it's precisely that government tie that has led to unhealthy, unsustainable development in my opinion. Well, just like Everrand's massive debt triggering a property market meltdown, China's own auto industry experts are now warning that BYYD could become uh the Everrand of the auto industry, potentially dragging down the entire ecosystem with it. Now, this problem didn't start just now or today, but no one dares speak openly about it, about BYD's suicidal moves until now. And if you think about it, the timing is striking. Public backslash against BYD erupted just as rumors swirled online about Xiinping's losing power and open criticism of BYD began in late May coinciding with a surge of speculation on Xiinping's possible downfall. Perhaps there's a political link, perhaps there's not. But today we'll focus on why BYD and China's e EV industry will blow up just like Everrand and the property market. We'll discuss BYD's dangerous price war strategy, its hidden debt problem, and also what happens if BYD defaults. All right, first things first. China's auto industry has been trapped in an unprecedented involution style price war since January 2023 when Tesla first slashed prices. Actually, let me turn this off. This is distracting. Sorry. Yeah, Tesla was the one uh actually that started the price wall in January 2023. Uh but um BYD has been this has been at the center of it um ever since. So it has now lasted 900 days with no end in sight. And Chinese media said that in 2024 alone more than 200 models have been dragged into the price war. And the average price drop per vehicle has reached 9.2%. And that caused a sharp decline in profit margins across the industry. And some automakers are even facing the bizarre situation where the more cars they sell, the more money they lose. Even though Tesla started it, BYYD has been at the center of this price war. Until the end of May, um, this May, no one openly criticized the company. But then BYD came under attack, targeted and besieged by its Chinese competitors, not Tesla. Auto industry executives in China began calling BYD the Ever Grand of the auto world. The first to break the silence was uh a man by the name of Let me share his picture. Where did he go? Here's the Tesla versus BYD. Okay. So, here is uh Mr. Wei. Here's Mr. Wei. He was the first one who spoke out against BYD. He is the chairman of uh Great Wall Motors and he's a um auto industry veteran in China with decades of experience, highly respect respected executive. So on May 21st during an interview with Sina Finance, he blasted the price war. He said, this is what he said. Um he said, "Pure EVs are deeply unprofitable. There's no way to form a viable business model. Capital has already left after taking its profit and returns. Some early investors have even sold off their shares. Now everyone is selling at a loss just to survive. And he warned that the price war was forcing uh automakers to cut corners creating serious safety and quality issues for consumers. And this is what he said. He said automakers are cutting costs even in areas like vehicle safety, lifespan, and reliability. Some models that used to sell for 220,000 uh or 220 to 230,000 yen are now selling for 120 and 130,000 yen. And he asked what kind of industry product can develop or can drop a 100,000 yen in price that that's about 45% cut price cut, right? So he's he asked what kind of industrial product can drop 100,000 un in price and still guarantee quality. He said that's simply impossible. Consumers who think they're getting a good deal may ultimately pay the price in poor quality and safety. So he declared he made these statement. He said there's already an Everrant in the auto industry. It just hasn't exploded yet. Now, he didn't mention BYD by name, but everyone knows there's only one company whose market position mirrors Everrand's dominance in real estate, and that's BYD. At the time, BYD had just launched its spring offensive. Another brutal price war designed to flip the table on the industry and squeeze out competitors. BYD slashed prices on 22 models with cuts as deep as 34%. Um, industry insiders in China had long suffered under BYYD's aggressive dominance and price cuts, but kept quiet because BYD is seen as a state favored company. Nobody wants to be on the wrong side of CCP politics. With way stepping forward and breaking the silence, the floodgates opened. Industry leaders big and small began piling on. All pointing to BYD as the Ever Grand of the auto world. Everyone is saying the BYD bomb is bound to explode. But from a public opinion point of view, it has already exploded. Um, the latest attacks came at the Chongqing Auto Forum which took place u on I think on June 7th and 8th. Um, and the chairman of Cherry Lee Lee Shu Lee Shu, Mr. Lee Shu, where are you? Oh, there there he is. Now, let me take a sip of water. All right. Okay. So, here's Mr. Lie Shu. Um, he gave a speech emphasizing safety and quality while denouncing reckless price cuts. He his speech clearly uh was referring to BYD's discount spree in May. Um, so now consider this. BYD's profit margin in 2023 was just 17%. I think in 2024 it's even lower. Um, if they're selling a car at 34% off, how can they possibly guarantee safety and quality? Right. And there's another gentleman, senior vice president of Giley Holding or Giley Automobile. His name is Yang Shuyang. There he is. And he also condemned the cutthroat competition, calling it suicidal. He strongly backed Mr. Wei, calling him the industry's whistleblower. Executives across the board now warned that this vicious price war could push the entire EV ecosystem to the brink of collapse. So the question comes, has BY gone crazy? Why does it do this? Well, analysts say um that through the brutal price war, BYD is trying to monopolize the market and force rivals out. Um but in doing so, it not only undercutting, it's not only cutting competitors, it's also squeezing its own dealers and suppliers. Just like Everrant, which gambled on being too big to fall uh or too big to fail, BYD seems to be betting that the central government or Xiinping himself won't let it fall due to its geopolitical significance. But the reality is this. This dragging down process of slashing profits industrywide has left BYD accumulating massive hidden debts. And debts always come true. I mean they always they have to mature. They they they will do one day. Um so in the end BYYD isn't just dragging itself down. It's dragging the entire industry down with it. So now let's talk about BYD's debt problem. We all know that Everrand's massive debt triggered its downfall and detonated the bomb that wiped out any profits from China's real estate market if there's any if there were was any ever any. How bad was Everrand's debt problem? As of late 2023, uh the company called China Everrand Group's total liabilities exceeded 2.4 4 trillion UN which is roughly about 330 billion US. So for context that's about the size of Portugal or Finland's um GDP. In other words, a whole country's economy um or Finland's economy or Portugal's economy wouldn't be enough to repay ever Everrand's debt. um its debt to asset ratio was 127% meaning that uh it owed 27% more than it owned. Now BYD's debt problem is much more subtle and concealed. Officially its 2024 debt to asset ratio was only 74 or 75%. It's uh it placing it third among China's top eight car makers. Above average but not the highest. There are two companies whose uh debt to asset ratios were uh above 80 and those are Cherries and Saras and globally most uh international automakers sit between 60 to 80% in terms of um debt to asset ratio. So BYD's number doesn't look alarming. In fact, BYD reported its debt ratio declined by 3% in 2024, one of the largest drops domestically and globally. So, the company's message was clear. Our financial health is improving. The risk of a debt blow up is shrinking. But Chinese financial statements, as we know, can be dressed up through creative accounting. BYD's real problem is how it has borrowed money. It's not how much, but it's how it borrowed money. The company claimed its net debt, that's interesting debt minus cash and cash equivalents, was just 27, a little under 28 billion yuan. But in January, um, a research company in Hong Kong called GMT Research, um, estimated that the company's real net debt as of June 2024 was 323 billion UN, not the 28 billion, but 323 billion, more than 11 times the the stated or the reported amount. And that's a massive discrepancy. Now, the difference lies in how BYID handles payables. GMT included overdue payables, those more than 90 days late as debt. These offthe-books liabilities don't carry interest. So, BYD doesn't report them as debt, but they are debt all the same. So, here's a red flag. Listen to this. Only 5% of BYD's total liabilities are interestbearing. uh meaning their loans or bonds. By comparison, other Chinese automakers um their numbers is 15 to 17%. And global brands are 50% or higher. meaning that most of these automakers um their bank loans or or bonds are at least 15 to 17% for Chinese automakers or 15 or 50% for global brands. So why is BYD's total liability uh or interestbearing liability is only 5%. Um there's something off here. And this abnormally low interest debt, low um interestbearing uh debt ratio suggests something deeper. They're basically BYD is shifting the financial burden onto their suppliers. So by delaying payments to part to suppliers and parts providers, they ease their own cash flow pressure without officially officially taking on debt. So it's stealth borrowing, right? The borrowing time and credit from from the supply chain instead of from financial institutions. So, normally once a supplier delivers goods, the automaker pays promptly. No cash. Well, you have to borrow from the bank. But BYD turns what should be bank debt into delayed supplier payments. Globally, automakers usually pay suppliers in 45 to 60 days. Tesla stretches it but still pays uh within 90 day 90 days 3 months. BYD's average payment term in 2023 275 days that's almost a year and most Chinese automakers settle their payments in 120 to 180 days. So BYD is twice as slow as the domestic average and four times slower than global norms. And this raises two questions. The first is why would any supplier still work with BYD? And the second one is if they're getting paid nearly a year later, aren't they afraid of going under? Well, the answer is hype and pressure. Um, over the last 5 years, BYD's sales, which has been fueled by state support, uh, allegedly exploded 20 times. I I don't know if this is true or not. I mean, that's what it claims, surpassing even te that of Tesla. So, suppliers believe the government would always back by. It was the clear market leader with massive volume. So many accepted the brutal terms in exchange for big orders. So these are the hypedin suppliers. Then there are also the pressured in ones. Um BYD's ruthless price war that we just discussed um shocked everyone. So, as competition intensifies and as competitors collapsed, suppliers fear that they would have no one left to sell to. So, it's better for them to be inside BYID's orbit, no matter the terms, than left out in the cold. So, this is how BYI coerced and exploits its supply chain. So what happens when the payment cycle stretches too long and a supplier starts collapsing? Well, BYD invented a workaround uh which is a digital accounts payable certificate called Dchain which is kind of a electronic IOU. I actually found an image of this. We can make this bigger. This is actually what a Dchain looks like. Um, it's a electronic IOU. It functions like a commercial acceptance bill. Suppliers can sell their future receivables to a third party for immediate cash at a discount. So, let's say BYD owes me 1 million yen payable in three months and I can't wait. I need the money. So I sell that I owe you to a cashrich buyer for 100 for 950,000 un 1 million in three months and they get a 5% return o only in three months. That's pretty good. So these payment vouchers have been securitized. Uh they're turned into financial products. People are now trading BYU debt uh believing it will never default because the state will always bail it out. Uh let me make this smaller. Yeah. So BYYD basically took it take takes advantage of its strong government support and um securitized this this um payable. So this is called supply chain finance and it's a fancy term for passing the financial stress to suppliers and third-party investors and it's similar to Everrand's inf infamous commercial bills but by learned the lessons from Everrand. It it's careful to avoid regulatory red lines. So by branding its system as a proprietary innovation uh BYD skirts oversight. So yes this arrangement gives suppliers some relief but that relief comes at a cost. Discounting discounting erodess supplier profits and strains their cash flow. And if you treat the discount rate like interest then these IUs are not interest free at all. They are interestbearing debt on someone else's balance sheet. Uh just not on the BYYDs and none of it shows up in BYD's official financial statements. And that's exactly why GMT research includes these overdue payables as part of real debt because in practice they are that's what they are. Now let's talk about what happens if BYD defaults. Um, this is really the interesting part. If BYD defaults on any of these payables and the final buyer can collect, the entire system centered around BYD starts to unravel. Um, because BYD's version of a collapse will not look like Everrands, the crisis won't begin up upst uh, if you think about it, won't begin upstream. The first wave of defaults wouldn't hit BYD itself, but its suppliers, right? As those suppliers go under, BYD's production gets disrupted, which then affects its car delivery schedule and then it will affect its financial bottom line. Um, and then will lead to downstream defaults. Um, it's a tangled web of cause and effect. It's what some people call a quantum entanglement of debt in today's China. And to make matters worse, BYD has forced its suppliers to cut costs aggressively over the past two years. What started as two to 5% cost reductions has jumped to 10 to 20%. suppliers are stretching to the breaking point and some have already gone out of business. The small medium ones have already gone out of business. So, China's own experts say the risk of a supply chain breakdown is growing rapidly. Um, and then on top of that, BYD has another problem. That's its stagnant sales problem. BYD faces slowing demand. Um, now due to population decline, China does not have 1.4 billion people, not even 800 million. I have estimated that China's real population can be as low as 300 to 500 million and you can watch my previous videos on that on that topic and I won't go into detail on that. So the bottom line is the market is much smaller than the government or the or industries's claim. And similar to its tactics to push liabilities to its suppliers, BYD has adopted a tactic that pushes sales targets downstream to dealers. And according to a a Chinese car salesman, BYD has been setting unrealistically high delivery quotas for its dealers, resulting in excessive inventory. The average monthly inventory per dealership has reached 2.5 months. Uh that's well beyond the industry's warning line of one and a half months. That means dealers have more than two months of unsold cars sitting idle in their inventory. So to hide sluggish sales, um dealerships have resorted to sell zero mile new cars as used. actually um either that or the dealership because the cars when when BYD pushes these cars to the dealership and recorded the transaction as sales, the car has already been sold once as a new car. So when the dealership sells them again, they cannot sell the car as new car. They have to sell it as a used car. Um and so according to uh great war great wall motor chairman um his name what was his name we we yeah he according to him he said 3,000 to 4,000 dealers are engaged in this practice which is falsifying sales to dress up financials right so the sales number is is is um the the first time the new car sales was falsified. The the the second hand when the cars are being sold as secondhand that's a real sale. So that's why these are brand new cars with with zero mileage. Um and so this is how the quote unquote the zero mileage secondhand cars uh came about. But the result is devastating. Now, as brand new secondhand cars flood the market, consumer confidence collapses. People stop buying new cars altogether. Buyers who did purchase at full price now see their vehicle value plummet within I mean immediately, right? People are waiting for the prices to go even lower. Um I mean who I mean at this point who's going to buy a new car if you can buy a new car at second secondhand price uh or prices right so it creates a vicious cycle falling prices falling sales and falling trust um now even people's daily the CCP mouthpiece has issued warnings that cheap lowquality EVs could damage the global reputation of mating China vehicles. I think it's inevitable. There's very little that the CCB can do. It's that the whole system is has has developed, you know, has has um regressed to this point, right? That's exactly how what made in China um has been defined as now in the EV industry. So last week um Beijing summoned two uh I think is it eight companies maybe the top eight maybe top 12 I'm not quite sure the number of companies but Beijing summoned top auto executives or or executives from top automakers uh to a meeting demanding they exercise exercise self-disipline. Uh these executives were told to stop selling at a loss and halt irrational price cuts. Um and officially and they specifically flaged their concerns over the zero mileage used car scandal. Um so right now the domestic demand for BYD's new cars doesn't exist. um because it takes time to rebuild consumer confidence. This this whole practice that BYD developed on its own has destroyed its own um has destroyed its own market um and and consumer confidence. I mean, even if if you have a good product and the economy isn't doing well and the market has has shrunk, but at least people know you have a good product, but now that that people don't have the confidence in a BYD car and meanwhile, global sales outlook doesn't look promising either. And experts have pointed out that the US market is virtually closed. Japan and South Korea are preparing to restrict Chinese car imports. Russia is no longer a reliable export destination. And in Southeast Asia, as one expert put it, the opportunities have dried up. Um, and not surprisingly, BYD's dealership network is under financial strain because they have nothing to sell. I mean, like someone said, the more cars they they they they sell, the more money they lose, right? So since April dealership um dealership in two provinces have gone bankrupt. I mean these are two dealership that uh strictly sell by cars. Um so two have gone bankrupt. So in reality China's EV sector is following the same playbook as its real estate industry. From day one, the government has been deeply involved providing financing, subsidies, policy support, but also imposing rigid controls. It's a state-run, state-driven industry. And um but but I mean another example in in a state economy, it's it's inevitable. The result is inevitable. Another example I could give you is um the steel industry in in the former USSR. When steel output was measured by weight in the former Soviet Union, factories produced extra thick heavy slabs that essentially were wasteful. Then when the metric changed to surface area, they made ultra thins sheets easy to hit targets uh regardless of market demand. So the goal was never to meet market demand. The goal was to meet uh to to game the system to game the government system. And that's what happens in government controlled economies, right? When you restrict interestbearing debt, non-interest debt explodes. When you fear a giant collapsing such as BYD or Everrand, then that giant starts dragging down everyone around it. Um, so lately concerns have grown that Chinese automakers are cutting corners on safety and their after sales service is extremely bad. Um I think it's on one hand it's the uh resources dedicated to after sales service on the other hand is the quality issue. Um the the amount of quality issues that require after sales service has skyrocketed. So they can't um there have been so so many videos, social media videos from people complaining about you know waiting uh in line or waiting for days to get their car to get the problem of their car serviced. Um I don't know if you've follow the news um um or follow this piece of news. Uh a week ago on June 3rd, a cargo ship carrying around 3,000 vehicles uh departed from Yentai portand and it it headed for Mexico. On route, it caught fire off of the coast of Alaska. The fire spread rapidly and the crew was forced to abandon the ship. And the cause? Well, the fire reportedly originated in the section of the ship carrying EVs. Um, fires involving EVs are notoriously hard to dis to extinguish uh due to extreme heat and the high risk of um uh reigni reignition, right? They can't they can't burn for days. And it said that out of the 3,048 vehicles on on board, 70 were uh pure EVs and 681 were hybrids. The vehicles came from multiple Chinese automakers, but the exact brand linked to the fire was not yet confirmed. Uh still the incident has uh raised serious concerns about the quality, reliability and safety of Chinese-made EVs. Um it's an issue that's gaining urgency um as scrutiny intensifies. I felt Western media coverage has barely scratched the surface. I mean they are talk they they did cover cover the the debt problem of BYD but they they merely just scratched the surface in my opinion and by comparison China's state media has uh by now been more forthcoming with what's happening in China. So that's why I'm here to bridge the gap and fill in the blanks. All right. So if you haven't subscribed to my channel for deeper insights into China, Chinese politics and the economy and EV industry, please do so. Now that wraps up my talk tonight. I hope this is helpful. Um, thank you. Let me see if people have any questions for me. Um I per I intentionally pick a different topic because if I can talk about the Chinese politics because there it's going crazy. It's going wild. There's just so many uh new development or new rumored development in coming out of China and but I think we should diversify our topics and we shouldn't just you know stick to one. So that's why I choose a different topic for tonight. Let's see what people think. All right. All right. BYD Peter J. Patricia J. Well, thank you, Patricia, for the super sticker. I want to first uh thank people who gave me super stickers. Simon Robinson Lei was in Hong Kong not that long ago. It seems to me that the economy has taken a big hit. Long uh east shops, restaurants closing all the time. Westerners and locals leaving. Can you look at this? Yeah. The economy in Hong Kong is is seriously bad. It it's it's it's not even funny. It it is bad. But when you say, "Can I look at this? I mean, do you want me to do a program just dedicated on Hong Kong?" Um, if if let's put it this way, if Hong Kong's economy, if if you could visually see how bad Hong Kong's economy is, then the economy in China is 10 times worse. And let's just put it that way. All right, let's see where someone asked me where is Xiinping. Uh, okay. Here's SIT BK07. When CCP falls, how do you see China moves toward democracy or their old ways of green and corruption will get in the way of freedom? Aloha from Hawaii. Um I think China will um I think the there will be a long there will be a long transition period. I think it will not I mean let's just say there there's a revolution happens right and CCP is toppled and a new republic will be established or the the ROC will return to China that will not happen like overnight. I think instead the CCP the communist regime will gradually fade out and that process may take some time. That process may take even take years. So it will not be like a French revolution and then uh out with the old and in with the new. I think that will not happen. But there will be a painful trying process that could take as long as long as a couple of years to transition. Um as far as what China will transition into, is it a a western style democracy? I I'm not 100% confident in saying that. It also depends on how the United States progresses from here because if you take a look at all the troubles in our country, it's there are serious issues. So, um the Chinese are are watching are observing what's happening in the US. You know, they may be saying if this is what American democracy boils down to, then I'm not quite sure if I want that. Um, of course they don't really understand, you know, profoundly the the the the division that drives American politics at this point, but they may watch it superficially and say, I'm not quite sure if I want that. So, I think that transition period will be quite long. And so, the ch it will be it will be a decision made over time. Um but I so that's why I can't say what it will be like but I can say that it will not transition into a western style democracy overnight. That I know will not happen um because it doesn't have the foundation and the support um or the type of leadership that could push China into that direction. It's lacking all of the conditions. So it will not happen like that. But over time is it possible? Of course it is. But it will be a long process. Okay, that's my answer. Okay, BYD. What does it What does BYD stand for? Is that build your dream? Yeah, it's it stands for build your dream, right? Oh, it no longer stands it stands for that anymore. Okay. All right. Let me just see. Uh, okay. Here's a question forwarded by Chris from Dlass. When did anyone have confidence in Chinese products? They buy them because they are cheap, right? Yeah. But there are uh some rental companies in Europe. I think the European government still haven't totally made up their mind about what to do with the cheap Chinese EVs. And I think the the consumer market, it's easy for the consumers, you know, to decide because I mean, everyone makes their own decision. No matter how cheap it is, they're not going to risk their life, you know, driving a dangerous Chinese EV. But it's hard to to say for the government. the government may buy some cheap Chinese EVs as I don't know buses or public vehicles or even um yeah public service vehicles. So the government may may still do that but still there are public safety risks involved. Um I think the consumer market it's hard because you have to convince the consumer one by one. Um so someone said from Bill love your analysis lei you must be in financial area. I used to be a financial analyst a long a while ago before before doing this. Don Porter well thank you Don Drusilla Schult great topic. Can China demand payment for US loans? Can China demand payment for US loans? I think China has US bonds, right? The treasury the treasury bills. So it can't really demand payments. I mean they're pay they're paid when when the when when it matures. Um so what China can do is just sell sell their bond holdings. And China has been doing that. It's its holding of US treasury bills have uh drastically declined. So it has been doing that. Okay. Uh Mitch, I was looking up BYD in the US. Seem they only make commercial trucks. You think it will go further? No, I don't think with the Trump administration they will not allow BYD in the US. Uh even commercial trucks, they shouldn't allow BYD here. That that's my opinion. Okay. Uh, Alan Mandal, thank you for the re report. Do you think the meeting between Trump and the Chinese negotiators brought any meaningful change? I think after day one, Trump was optimistic, right? Um but I like I said not until the dust settles in Beijing um between the you know for the power transition not until the next leadership uh is formally put in place to handle uh foreign affairs or even trade negotiations. I think these talks will be just one step forward and half step back or it could be one step forward and one step back. I mean there will the Chinese will drag on the process as long as they can because number one they're not ready because who is making the final decision. The two sides are still fighting. I don't think Xiinping has totally given up or his faction has totally given up its effort to regain control. So, so these negotiations don't mean anything. But the Chinese know that they have to they have to put in the action to do it. So they will negotiate and then they will just not they will not fulfill it. Whatever they negotiate they will not fulfill. They want to drag on the process as as long as they can. Um, so until until the power struggles uh settles down. So, okay, here's a question forwarded by Chris. How about how about the US government's massive debt? Will that come due or will they just print more money? Well, that will come due. All debts will have to be paid. Um, and will they print more money? Well, I think Trump's plan is to stimulate the economy. I mean, the the only way I know the the dispute he has with Elon Musk was the Musk believes that he should cut more so that we could balance our budget. But Trump's idea is to stimulate the economy so that we have uh a flourishing economy. when the economy grows bigger and when everyone makes more money um then the entire society whether the government or the private sector have more money to pay back the debt and so that's that's his idea right but if you cut too much if you cut too much into your spending then you're going to kill the economy yes you can balance your book but the the economy will go dead because if you cut everything it's just not going to go anywhere and and so so what's the point of balancing your budget when you're going to kill your economy? So, uh I don't know what was what was the question. What would that come do? Will they print more money? So, it depends on whether his plan to stimulate the economy will work. If it works according to his plan, then hopefully we don't need to print more money. Um but if it doesn't work, then we'll have to. So, Okay, China needs a President Trump. Maybe the Chinese people don't mind. Actually, the Chinese like I think the Chinese quite like Trump. I mean, they like character. I think the Chinese like a leader because this all the CCP leaders are so boring. They have no character. I mean, their character is very CCPish, right? They have no you don't see the real person. So as a contrast, Trump offers a lot of personality. So the Chinese I think may be very open to to having a leader like Trump, you know, someone who's uh very loud and very, you know, transparent. I mean, his transparency is is amazing. And so I think the Chinese may like that. I just as a as a as a for a change because what they have right now is the complete opposite of Trump. Okay. All right. Well, that's just my opinion. Um All right. Let's see. Okay. I I'm going to pick some random question. All right. Gregory Mark five, will China have more demonstrations? Uh, if the economy continues continues to deteriorate, there will be more for sure. Yep. And there's springing up everywhere. And someone said Trump isn't loud. He's perceived as loud. Of course, I have not. I have not hear him speak, so I don't know if he's loud or not, but he's, you know, there's that stigma about him. Um, all right. So, that seems to be all I reached the bottom. I actually did. Um, all right. Let me just pick another question. A random question. Uh, Netflix foreign. I think China will call out the US on what they owe when the US debt to China becomes greater than the Chinese debt to the US during World War II. Yeah, I wonder what happened to the Chinese debt to the US uh during World War II. Although the CCP can say that's that's debt the ROC because that's debt you know uh incurred during the ROC government. So the CCP can say well it's not mine but they also can't afford to claim that because if they did that would be the same as as acknowledging the existence of the ROC government. So this so that's another issue that's another thing that the US government can raise to um to China to both the PRC and the ROC by saying wait a minute there's a debt here um so who's going to pay is it the ROC or the PRC because then you effectively acknowledge that there are two governments right they're independent and the if if the PRC say we own Taiwan or Taiwan is an uh inseparable part of China, then they owe the debt. Then the PRC owes the debt. So that that would be a great strategy that the US should use to see who who to see what Beijing will say. All right, that's all for tonight. Oh, here's um uh here's another super sticker from Drilla. Well, thank you. Uh from Jack Pit Batra forwarded by Chris Ashley, is there any indication that CCP will change its policies if there's leadership change? Of course, they will change its policy. They're already changing that. I would probably talk about that on Thursday and even this weekend. They are quietly changing policy and or the direction where the country is going. They're very subtle but you if it's one or two you may say they're random but they are coming out successively and it's consistent. So the policies are changing already. Someone asked me why are west western media outlets not talking about the the power the the fact that Xiinp has already lost power. Um that's an interesting question. I think they why I think they've been um afra they're afraid to touch that subject. I think they're afraid to to to speak the fact that Xiinping might have already lost power or or Xiinping might be stepping down soon. They're afraid to touch that subject because the next thing they know is they will get phone calls from Chinese embassy or consulate and and then within their organizations those who have been bought out by the by Beijing uh will oppose it. So they they will open a can of worms for themselves. That's why they avoid it. It's not that they don't know. Of course they know. They just don't want to talk about it to save face for for for CC for the CCP and to save troubles for themselves. Okay, that should be all. I want to end it here. I thank you for joining me and I'll see you in two days. Bye-bye.