Xu Jiayin's Million-Dollar Mansion and The ‘Harem’ In Beijing: Lavish Life or Something More?

CCP nears collapse? Police salaries also cut in first-tier cities, big economic provinces face financial depletion. China's lottery sales soar by 53% in August amid economic downturn. Intense competition in China's job market, 24-hour AI Livestream shopping hosts emerge. Many at Evergrande arrested. Who will cover the massive debts? Su Jiayin raises numerous actresses, Beijing luxury mansion proximity to Zhongnanhai. Analysis, Evergrande not the only economic zombie, CCP confronts thorny problems. It's all covered in today's China Truths. CCP nears collapse? Police salaries also cut in first-tier cities, big economic provinces face financial depletion. The seriousness of the fiscal crisis in various Chinese local governments has recently caught the attention of foreign media. Even police officers are experiencing salary cuts, raising doubts about the stability of the Chinese Communist Party, CCP regime. On September 30, Radio Free Asia reported that insiders revealed that several economically prosperous provinces, such as Jiangsu, Tianjin, and Guangdong, are facing financial depletion. In more detail, right now, in Tianjin, schools, public institutions, and some government employees have had their performance bonuses and weekend overtime pay canceled since last year. Starting this year, there has been a significant increase in salary arrears. A well-known entrepreneur has stated that Tianjin's finances have been in a state of bankruptcy for quite some time. The only apparent solution seems to be increasing taxes, which has placed an unbearable burden on businesses. This situation, including in Shanghai, has exacerbated a chain reaction where deteriorating economic conditions have driven local officials to intensify their extortion and demands for money from local businesses. Each transaction they engage in adds to their personal gain. This entrepreneur has already been fined over 100,000 yuan, approximately 13,940 US dollars, this year. Even the top two provinces in terms of GDP, Guangdong and Jiangsu, faced financial crises last year. As previously reported, insiders report that in Nanjing, the capital of Jiangsu province, specifically in districts like Lishui and Daocheng, salaries of civil servants and employees in public institutions have been unpaid for approximately three months. Meanwhile, in Guangdong, on the other hand, there has been a substantial reduction in the salaries of retired individuals, with cuts surpassing one third. An anonymous official from Hunan has revealed that salary reductions within the government system are occurring across the country, though the extent varies by region. Notably, many internet users are discussing the fact that salaries for professions like doctors, teachers, journalists, and police officers are all being reduced. This suggests that China has entered an era of salary cuts for everyone. Ms. Yan, a retired teacher from a government institution in Tianjin, revealed that police officers in Tianjin, Nanjing, Dalian, and other locations have experienced a 20% reduction in their salaries. She emphasized, this only began after the epidemic. What people used to see as secure jobs with stable incomes, like the Iron Rice Bowl and Golden Rice Bowl, are now facing salary cuts, and this isn't happening uniformly across all areas. Scholars have consistently emphasized that once the CCP can no longer sustain the functioning of its military and police, the regime will crumble. Last year, political and economic analysts also introduced a concept known as post-CCP China. According to this theory, the CCP's rule will disintegrate in the absence of financial resources. Every administrative unit within the CCP is operating with a fiscal deficit, and the central government lacks the funds to compensate for it. If this situation persists for a continuous period of 24 months, China will find itself in the post-CCP era. Furthermore, if news circulates that police officers in a particular region of China are not receiving their salaries, it would serve as the clearest indication that post-CCP China has commenced. This is because the gun barrel system, which upholds the CCP regime, is financially depleted, indicating a truly hopeless financial situation. China's lottery sales soar by 53% in August amid economic downturn. Against the backdrop of China's economic weakness, the CCP's Ministry of Finance asserts that the lottery business is thriving. According to data from the China's Ministry of Finance on September 26, lottery sales in China soared to a new high for the year in August, reaching a staggering 52.957 billion Chinese yuan. This represents a significant 53.6% increase compared to the same period last year. Data also reveals that from January to August this year, total national lottery sales reached 375.76 billion yuan, which is 51.6% higher than the same period last year. Furthermore, in recent days, choose lottery tickets over luxury bags and parties has become a popular saying among young people in mainland China, driven by the pressures of rising housing costs and a slowing economy. More and more young individuals are opting to invest in lottery tickets, chasing a glimmer of hope and potential wealth opportunities rather than indulging in luxury goods or extravagant celebrations. A well-known internet personality in mainland China spends 100,000 yuan on lottery tickets each month, and her popularity has soared as a result. One Weibo user commented, among young people, the chances of winning $5 million are greater than earning $5 million through work. Another Weibo user humorously noted, the worse the economy gets, the more lottery tickets are sold. Commenting on this issue, Professor Huang Xinxin from the Shanghai University of Finance and Economics stated in an interview that this trend reflects the ongoing economic downturn, where people have lost confidence in their ability to earn money through conventional employment. As a result, they are turning to alternatives like buying lottery tickets to dream of achieving financial prosperity. Some analysts also suggest that Chinese people's affinity for lotteries may not necessarily be driven by the hope of overnight riches, but rather by a desire for a feeling of momentary small luck to temporarily alleviate the stresses of everyday life. Intense competition in China's job market, as 24-hour AI live stream shopping hosts emerge. In the context of mainland China's economic difficulties, businesses are continuously contemplating cost-cutting measures. Lately, the term 24-hour AI anchors has rapidly gained prominence in China, adding significant competition to the already challenging job landscape. Unlike many other countries, the most lucrative sales channel in China's online shopping landscape remains live streaming. Popular hosts on platforms such as Taobao and Douyin can complete a substantial number of transactions in just a few hours each day. For example, Li Jiechi, who previously stirred controversy with his arrogance, once achieved a remarkable feat by selling 15,000 lipsticks in just five minutes, earning him the moniker Lipstick King. He has promoted a wide range of products, including food, cosmetics, and household items, reportedly selling millions of dollars' worth of goods night-to-night, leading his income to reach a staggering 1.8 billion yuan, approximately $250.9 million US dollars, surpassing the income of many companies. However, grooming an exceptional online seller demands a substantial investment of both time and money as production teams and assistants add to the overall expenses. Moreover, even the most skilled sellers require periods of rest. AI anchors, on the other hand, do not encounter these limitations. Chin Dan, the CEO of an AI-specialized company, said that, if a company hires 10 livestream hosts, their skill levels will vary. Perhaps the top two or three hosts will contribute 70% to 80% of the total sales. Virtual livestream hosts can replace the remaining six or seven hosts who contribute less, because these hosts have lower return on investment and costs will be significantly reduced. It does not deny that, in reality, top livestream hosts in the field of livestream marketing in China still perform much better than any AI virtual hosts. However, for many companies, it makes more sense to initially invest some money and then let these virtual hosts automate the work. This is because it is more cost-effective and can promote products 24 hours a day. Currently, the cost of generating a basic AI clone host is approximately 8,000 yuan, approximately 1,100 US dollars, including one year of free technical maintenance. However, more advanced clone hosts may actually cost more, reaching thousands of dollars. Furthermore, in the sales process, scripted information is also generated by AI-driven software. Therefore, all the company needs to do is input the name and price of the product and then let the clones handle the rest of the work. This is the perfect way to achieve the hottest buzzword in today's Chinese marketing industry, reduce costs and increase efficiency. Although AI anchors have been present in the news industry for some time, as this technology starts to significantly impact China's live broadcasting market, it appears that some less proficient anchors may face challenges in the midst of an already deteriorating competitive job market. Many at Evergrande are rested. Who will cover the massive debts? After the arrest of Evergrande Group's chairman, Su Jiayin, his second son, Su Tinghe, and several key members of the group, the most significant question now is who will bear the burden of the debt, which amounts to a staggering 2.4 trillion yuan, approximately 328.7 billion US dollars. As of December 31, 2022, in addition to the 2.4 trillion yuan debt, including billion US dollars in foreign debt, Chinese media has revealed that the company has left at least 1.62 million unfinished properties spread across various parts of China, affecting approximately 6 million homeowners who have made payments but have not received their homes. The fate of these 6 million homeowners has become a heated topic of discussion on mainland social media. Some have called for actions like whoever takes the money collected from homeowners should return it to recover illegal gains and ensure property delivery. And any bank executive who approved the misappropriation of building funds should use their own property to cover the debt. Guo Tianran, alias the owner who spent nearly 900,000 yuan to purchase an Evergrande property in early 2021, lamented that he had invested his retirement savings and 30 years worth of future wages into this property. He watched as the main framework of the house was built, but suddenly Evergrande went bankrupt, and now he may end up with nothing. Guo said that many homebuyers have stopped their loans and told the banks that they won't pay anymore. He stated, when construction resumes, we'll pay our mortgages. If they keep pushing us, we'll sleep in the bank's lobby. Regarding this matter, American economist Davey Jay once stated that, regarding Evergrande's overseas debt, we believe that Beijing should intervene this time due to international influence and the need to protect its international image. So in terms of US dollar bonds, we estimate there is a possibility of redemption as much as possible. As for the domestic debt and creditors, it may ultimately be taken over by the central bank or a central state-owned enterprise. As for the issue of unfinished properties, David Wang suggests that Beijing may try to complete unfinished properties in major regions like the Pearl River Delta, Yangtze River Delta, Bohai Rim, and provincial capitals as much as possible. However, for less valuable properties, authorities may choose to let them deteriorate further. Regardless of debt restructuring or state-owned enterprise takeovers, in the end, the burden may fall on the people through currency devaluation. Meanwhile, commentator Sherjean stated, it's definitely the common people, Chinese banks, including the creditors who will bear the burden. It's impossible for the CCP to pay for it. So it's about deceiving the common people and deceiving American investors. He suggests that all major corporations in China, including those backed by the CCP's elite, rely on various forms of support, including policy funds, to grow. In fact, seven years ago, Moody's and S&P downgraded Evergrande's rating to be minus, advising against buying its bonds or stocks or continuing to lend to it. However, major CCP-controlled media outlets refuted this and elevated Evergrande's rating to the only AAA highest grade. Su Jiayin raises numerous actresses' Beijing luxury mansion proximity to Zhongnanhai. Surrounding the increasing revelations about Evergrande's chairman, Su Jiayin, recently, information about the villa near Zhongnanhai and the Evergrande dance troupe, which employed a large number of actresses primarily to serve Su Jiayin personally and his clients, has sparked a lot of public discussion. In a video, Su Jiayin's mansion is located near Shikuhai in the Xicheng district of Beijing. This area is a scenic spot close to Beijing's central axis and connected to Zhongnanhai. Contract Quannola, an imposing quadrangle with tall gray-blue brick walls. The main entrance is sealed and not yet completed. The local resident mentioned that Su Jiayin's mansion is adjacent to the mansion of China's internet billionaire Jack Ma, which has three underground levels. Jack Ma's mansion covers 4,000 square meters. And from the video, it's clear that Su Jiayin's mansion is also substantial in size. According to Beijing's property prices, its value is likely to be in the billions. Su Jiayin not only owned a luxurious mansion, but also established a dance troupe comprising over 100 members, all of whom were young and attractive dancers. Public records indicate that the Evergrande Dance Troupe was founded in October 2010 and is a wholly owned subsidiary of the Evergrande Group. Insiders have disclosed to the media that the recruitment standards for the Evergrande Dance Troupe were exceptionally strict, requiring female graduates from prestigious schools who were young, beautiful, and subjected to final interviews conducted personally by Su Jiayin. Since its inception, the Evergrande National Dance Troupe has participated in multiple CCTV Spring Festival Gala performances. Furthermore, in recent years, the troupe has been invited to participate in various national performance events, including the Hangzhou G20 Summit, the Beijing Belt and Road International Cooperation Forum, and the 90th anniversary of the founding of the CCP's army. Nevertheless, its primary role has been to serve Su Jiayin personally and cater to his clients. At its peak, the Evergrande National Song and Dance Troupe had a total membership of over 200 people, encompassing individuals with various talents. Even as Evergrande faced financial difficulties, their commitment to this dance troupe remained unwavering, no reduction in staff, no layoffs, and no salary cuts. As per media reports, when Su Jiayin was in a low mood, he would have the dance troupe put on a show for him, and he would watch their performances attentively from the audience. Moreover, this dance troupe has assisted Su Jiayin in handling numerous public relations challenges. This information has ignited a vibrant discussion on social media. Some netizens expressed their thoughts, even bounding another real estate company has its own dance troupe. Why do these real estate companies maintain dance troupes when they have gone bankrupt? Is it a cost-saving measure? Perhaps, when guests or leaders visit, instead of frequenting nightclubs, they establish their own dance troupes, which are easier to manage, more hygienic, and cost-effective. It's a real advantage. Analysis, Evergrande not the only economic zombie, CCP confronts thorny problems. In connection with the Evergrande collapse, Taiwan's Kai Xi'an media chairman, Xia Jinha, foresees that after Evergrande, more dominoes are likely to tumble, including real estate developers like Country Garden, Sunac, Shimao Group, Kaise, Sino Ocean Group, Agile, and Aoyuan. He wrote on Facebook, what follows is how much bad debt financial institutions will swallow. With property prices falling, how many people will end up in negative equity? Then there's the leveraging, local government debt crises, and pension fund emergencies. China as a whole is facing a prolonged adjustment of its real estate bubble, possibly a decade, two decades, or even longer. Ian Williams, a former foreign correspondent for the UK's Channel 4 and NBC, warned that the problem the CCP faces now is that Evergrande is not the only zombie in China's valley of the living debt economy, and the impact of Evergrande's collapse may be beyond the authorities' control. In the past, both domestic and foreign investors believed and were addicted to the idea that the stable Chinese Communist Party would do everything to avoid Evergrande's complete collapse. They believed that even the largest zombie companies would receive assistance from the authorities, and Beijing would never allow Evergrande to fail. But now, the situation has changed. Amid strong investor concerns about China's slow economic recovery and the real estate crisis, foreign investors sold a net 80.1 billion yuan, approximately 11 billion US dollars, of stocks through the Shanghai-Hong Kong Stock Connect between July and September, marking the largest quarterly net sell-off since the launch of the program in 2014. Williams, in an article for The Spectator, stated that the collapse of China's real estate bubble is closely tied to the shadow banking underworld. Shadow banking operates outside of official regulatory oversight, and its scale is so large that it can only be guessed at. Coupled with local governments facing increasingly severe fiscal crises, local governments heavily rely on revenue from land sales and other opaque financing tools. He wrote, China's economy sounds like a mess, and in fact, it is. As concerns about liquidity and weak housing demand intensify, market sentiment further deteriorates, and Bloomberg's real estate stock index has fallen to its lowest level in 12 years. Furthermore, the results of a September monthly sentiment survey by Bank of America also showed that 1 third of US fund managers consider Chinese commercial real estate as the most likely factor to lead to a systemic credit event. This proportion has more than doubled from August, surpassing concerns about US commercial real estate. Don't forget to 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.