China to Descend into Chaos by Next Spring? | China Truths

Welcome to China Truths. In this episode, we will bring you the following stories. China's Real Estate Market on the Brink of Collapse as State-Owned and Foreign Firms Retreat. China to Descend into Chaos by Next Spring. Wu Xijin Reveals 6 Hospital Visits in 2 Weeks. Now, let's dive into the details. It's all covered in today's China Truths. China's Real Estate Market on the Brink of Collapse as State-Owned and Foreign Firms Retreat. Recent developments highlight the deepening crisis in China's real estate sector. Both state-owned enterprises, SOEs, and foreign firms are taking steps to exit the market, signaling a lack of confidence in the sector's recovery. On November 22, Gri Real Estate announced plans for a major asset restructuring to shift away from the property business. The company intends to exchange its stakes in five subsidiaries, as well as a loan to Hengqin Financial Investment Group, for a 51% stake in a duty-free retail group held by Haitu Company. This move marks Gri Real Estate's transition from property development to focusing on duty-free retail and consumer markets. Gri's parent company, Haitu, is controlled by the Zhuhai State-Owned Assets Supervision and Administration Commission, making this a significant SOEs decision to abandon the real estate sector. While SOEs pivot away from real estate, foreign investors are also pulling back. Capital & Investment Limited, a major Singapore-based real estate investment management firm, has announced plans to reduce its exposure to China by 10% to 20% by 2028. Currently, 27% of its portfolio, equivalent to S$30.51 billion, or approximately US$22.7 billion, is invested in China. During its investor presentation on November 22, Capital & warned of potential losses from the ongoing crisis in China's real estate market. The company, a subsidiary of Singapore's state-owned Temasek Holdings, has been a key investor in China for years but is now seeking to scale back its investments. According to a November 6 report by Citigroup, Capital &'s management revealed plans to sell approximately S$1 billion, or about US$744 million, worth of Chinese assets by the end of the year, with S$300 million, or about US$223.2 million, already liquidated. Despite efforts by the Chinese government to revive the real estate sector, confidence has all but vanished. Decades of overleveraging and speculative investments have left the market on the verge of collapse. Investors, both domestic and foreign, are scrambling to exit, viewing the sector as a financial wasteland. This exodus underscores the dire state of China's economy, where the real estate industry has long been a cornerstone. The withdrawal of both SOEs like real estate and major foreign players like Capital & signals a fundamental shift in market dynamics, with far-reaching consequences for the global economy. China to descend into chaos by next spring? China has recently witnessed a surge in widespread antisocial incidents across the country. On November 22, the pro-Beijing Singaporean newspaper Liena Zaobo reported on China's Ministry of Public Security's announcement of its intention to ensure social stability through this winter and into next spring. The article, titled CCP Ministry of Public Security, Resolutely Ensuring Social Security and Stability This Winter and Next Spring, details a nationwide initiative called the Winter Action Plan. The report, citing the China's state-owned Xinhua News Agency, stated that Wang Xiaohong, a member of the Central Committee Secretariat and Minister of Public Security, emphasized in a national videoconference on November 21 the need to address key issues such as resolving social conflicts and eliminating safety hazards. He underscored the importance of comprehensive interdepartmental coordination to prevent extreme incidents and to maintain public order. On the social media platform X, a user named Daniel Fong shared a screenshot of the report and commented, from another perspective, does this mean the Ministry of Public Security already knows the country will fall into chaos by next spring at the latest? Other netizens echoed similar sentiments as follows. China's economy has collapsed. The power structure has collapsed. Faith has collapsed. Everyone is in debt. The ground is littered with violence and extremism. People want change. Chaos leads to change. What about the spring-summer transition or the golden autumn of October? You wicked people are going to exhaust yourselves. Could it be that a certain person might not survive past next spring? The widespread speculation and critical online commentary reflect growing public discontent and anxieties over the stability of both the Chinese government and its leadership amidst deepening economic and social turmoil. Hu Xijin Reveals Six Hospital Visits in Two Weeks Hu Xijin, the former editor-in-chief of the Chinese Global Times, recently disclosed on social media that he had visited the hospital six times in two weeks, leaving him emotionally drained. Known for his vocal defense of the CCP, Hu has recently faced unprecedented personal and professional challenges, including censorship and significant financial losses in the stock market. On November 23, Hu wrote on Weibo, Today, old Hu is in a bad mood. My emotions feel weightless and ungrounded. Over the past two weeks, I've visited the hospital six times. This morning, I was woken by my alarm clock and headed there again. When I left the hospital, I felt I had reached my limit. The thought of having to go again next week almost broke me. Hu described the exhausting process of hospital visits, compounded by long waiting lines. He lamented that every visit felt like a torturous ordeal, with no end in sight. He also recounted a mishap when he accidentally left his medical imaging films in a taxi. Realizing this, he chased after the cab frantically and fortunately managed to retrieve the films at a turn. After leaving the hospital today, I felt so weak I could barely walk. Before getting on the subway, I found a spot to sit and catch my breath, calming my emotions. Hu shared, In a tone of self-reflection, he added, Complaining a bit and wallowing in self-pity is enough for now. My situation isn't that bad compared to the patients and families dealing with more severe illnesses. If I constantly pity myself, isn't that just pretending to be pitiable? Since last year, China's economy has been in decline, and its political environment has grown increasingly restrictive. Beijing has intensified censorship, even silencing long-time loyalists like Hu Xijin. In July this year, Hu was reportedly banned from speaking. Liu Jipeng, former dean of the School of Business at China University of Political Science and Law, revealed in a September video post that Hu's silence was a three-month punishment until October 27. Hu admitted through Liu, I must strengthen my learning and fully and accurately understand the meaning of the Hu's troubles stem from his interpretation of the 20th Central Committee's Third Plenum Communique. He noted that the phrase public ownership as the mainstay, which appeared in the 2013 Third Plenum's decision on reforms, was absent in the 2023 version. Hu argued that this indicated a historic shift toward true equality between private and public ownership. Analysts cited by Radio Free Asia said Hu's comments crossed the CCP red line. Taiwan-based up-media commentator Du Xun suggested that Hu may have overestimated his influence due to his long tenure as a CCP mouthpiece. Alternatively, Du posited that the party's increasing authoritarianism and fragility could no longer tolerate even mild differences from figures like Hu. Hu's remarks also touched on a sensitive debate within the CCP about its economic policies. Under Xi Jinping, the focus on political stability over economic openness has led to mounting challenges for China's economy. Hu's observations, therefore, carried significant political implications. In addition to his political woes, Hu Xijin's foray into the stock market has been far from successful. After announcing his high-profile entry into the market last year, Hu revealed in June 2023 that he had lost 74,500 yuan or nearly 10,300 US dollars, which is 10.65% of his total portfolio. Skeptical netizens speculated that his actual losses could be much higher. On November 22, the A-shares market saw all three major indices fall, with over 4,900 stocks declining. Hu disclosed on social media that he had lost 12,000 yuan or that day alone. However, his latest post, part of a series of stock market diaries, was quickly deleted. Don't forget to comment in the section below to share your opinions on today's topic with us.