China Faces A ‘Bottomless’ Crisis; Analyst Says China's Hope Lies In Action

From China Dream to China Poor, 10 Shocking Phenomena. Hunan Supermarket Rumored to Close. Citizens Fear Zero Balance on Prepaid Cards. Panicked by Goods. Is the CCP's End Near? Analyst Says China's Hope Lies in Action. Leaked Recording Exposes Corruption in China's Education System. Deputy Director Takes Bribes from Meat to Money. New York Spy Case Sends Clear Warning to CCP Agents and U.S. Government. It's All Covered in Today's China Truths. From China Dream to China Poor, 10 Shocking Phenomena. In 2012, Xi Jinping introduced the China Dream, aiming for national strength, ethnic revitalization, and public happiness. However, under his leadership, China now faces severe economic decline and widespread hardship, turning the China Dream into China Poor. A recent New York Times report highlighted a stark shift. A 2014 survey showed 77% of Chinese felt wealthier than five years prior, but this figure has plummeted to 39% today, signaling rapid wealth erosion and growing poverty. Song Guocheng, a senior researcher at Taiwan's National Chengchi University, identifies 10 major struggles facing Chinese citizens. marriage, childbirth, housing, healthcare, retirement, and end-of-life care. These encompass life's challenges from birth to death, reflecting a comprehensive crisis. Song describes this shift as a historic transition from the China Dream to China Poor, with the economy in a bottomless state where remedies prove ineffective. He highlights 10 alarming trends. Firstly, extreme wealth inequality. Nearly 70% of China's population earns under 2,000 renminbi per month, while 1% controls 90% of wealth. About 200 million people live in poverty, with a 359-fold disparity between the richest and poorest families. Secondly, emerging social volcano. A study titled Social Volcano shows Chinese perspectives on poverty have shifted from blaming personal shortcomings to criticizing unequal opportunities and an unjust economic system. Song warns of implosive social resentment, reflecting discontent with the current leadership's rule and despair over personal survival. Thirdly, social self-destruction. China is witnessing a troubling rise in social self-destruction as a form of protest. Recently, a female employee of China International Capital Corporation took her life due to the inability to pay her mortgage after the real estate market collapsed. Similarly, a top graduate from a prestigious Beijing university was found dead in a Xi'an apartment after repeatedly scoring first in civil service exams but failing interviews, exposing the rampant use of connections, backdoor deals, and bribery to secure jobs. Many young people, struggling with long-term unemployment due to a lack of connections, see social self-destruction as their last resort. Fourthly, the lament of the elderly. China's elderly population, currently at 290 million, is expected to exceed 400 million by 2035 and reach 500 million by 2050. With the economy in decline, elder care has become a critical social issue. Song Guoqing describes China's welfare system as wealthy enjoyment, where the rich, including CCP officials, receive extensive benefits such as housing, health care, and bonuses, while the poor, especially rural elderly, are left with minimal support. This disparity leaves many elderly in dire conditions with inadequate care. Fifthly, the rise of restaurant undertakers. China's catering industry is in crisis, with profit margins plummeting. In Beijing, the food and beverage sector saw an 88.8% drop in profits in the first half of this year, with profit margins at just 0.37%. By the end of 2023, over 1.265 million catering businesses had their licenses revoked, double the number in 2022. In the first half of 2024 alone, 1.056 million catering businesses closed, with nearly 460,000 closures in the first quarter, up 232% from the previous year. Many new restaurants fail within months, some even closing just days after opening. Amidst this downturn, a new industry of restaurant undertakers has emerged, collecting and reselling equipment from shuttered establishments. In Guangzhou, where restaurant closures have surged since March, operators report recovering kitchenware and supplies from 40 to 50 restaurants monthly, mostly hot pot and milk tea shops. Sixthly, vicious competition and overcapacity. China's economy is grappling with severe overcapacity, weak domestic demand, and inventory surpluses, driving many companies into aggressive price wars. In the steel industry, July 2024 data shows profits of key steel firms plummeted by 88% year-on-year and 90% month-on-month, leaving only 1% of companies barely profitable. The solar industry faces similar challenges, with prices of polysilicon, wafers, cells, and modules hitting record lows, dropping by 40%, 48%, 36%, and 15% respectively since early 2024. Many companies are now operating below cost, resulting in significant losses. Seventhly, leading enterprises on the brink. China's major companies are struggling. Evergrande New Energy Vehicles, a leading automaker, reported a massive loss of 20.257 billion yuan, about $2.9 billion, in the first half of 2024, a 194.73% increase from the previous year, with only 40 cars sold in six months. The real estate sector is also in deep trouble, with all top 10 companies in debt or bankruptcy, including Vank, one of the world's largest developers, now facing insolvency. Eighthly, middle class collapse. The middle class, symbolized by the piano industry, is also in decline. Over the past year, 7,000 piano shops have closed across China. Major brands like Heilong Piano and Pearl River Piano reported losses in the first half of the year. In Luoxi Town, Huzhou City, Zhejiang Province, known as China's piano town, numerous piano manufacturers have gone bankrupt, highlighting the collapse of the middle class. Ninthly, rise of the rottentail kids. Xi Jinping's focus on high-tech industries has left behind a generation of highly educated youth who missed earlier economic growth and couldn't adapt to new sectors. These rottentail kids, despite holding college degrees, are often stuck in low-paying jobs or face long-term unemployment. This year, the number of college graduates reached a record 11.79 million, while the urban youth unemployment rate for ages 16 to 24 hit 17.1% in July, the highest this year, excluding millions of unemployed rural youth. Tenthly, skyrocketing debt and fiscal strain. China's debt crisis is severe, with total debt reaching 390 trillion yuan, about 55.02 trillion dollars, by 2022, including 114 trillion, about 3.56 trillion dollars, from central and local governments, 220 trillion, around 6.86 trillion dollars, from state-owned enterprises, and 56 trillion, about 7.9 trillion dollars, from the financial system. This debt is three times China's GDP, indicating that GDP growth can no longer keep pace with the fiscal deficit. Despite these dire conditions, the CCP continues to pour funds into grandiose projects to boost national prestige, such as foreign aid, China's Starlink, the Grand Canal, and the Peace Ark mission. While the public endures hardship, China's global status is prioritized. Song Guoqing bluntly stated, Xi Jinping's China dream isn't a dream of a better life for the Chinese people but his own empire dream. He quipped, the people are suffering, while the CCP spends lavishly like a goddess scattering flowers. Hunan supermarket rumored to close, citizens fear zero balance on prepaid cards, panic by goods. A supermarket in Zhejiang County, Shangqiu City, Hunan Province, was rumored to be closing, sparking panic among residents who feared losing their prepaid card balances. Crowds rushed into the supermarket, nearly emptying its shelves. Some customers impatiently tore open packages and ate inside, creating a scene that resembled a disaster aftermath. The supermarket has temporarily suspended operations. A staff member told China News Weekly on Sept. 6 that the influx began on Sept. 4, with customer numbers surging to several times the normal rate after rumors spread. This forced the supermarket to extend its hours until midnight, with police stepping in to manage the crowd. The staff noted that most customers were using prepaid cards, and while there was no widespread theft, many were eating and drinking on-site. As of now, the supermarket's stock has been depleted, and losses are still being assessed. The store announced it would pause operations from Sept. 6 for a few days and reopen after restocking. According to Tianyanka, on Aug. 28, the supermarket's parent company, Shicheng Xingfu Wanjia Trading Company, Ltd., was subject to an enforcement action for 4.9009 yuan, about $689,345. On Sept. 7, the WeChat official account Wangxin Xiangqiu reported that rumors about the supermarket's closure spread quickly on social media, triggering the buying frenzy. However, the closure rumors are false, and the supermarket has reported the incident to the police. The account responsible for spreading the rumor has been interviewed. Is the CCP's end near? Analysts say China's hope lies in action. One incident in Qingdao has sparked widespread public anger after a woman driving a Land Rover assaulted a veteran. Retired military personnel from across China rallied in Qingdao, and many posted videos online showing themselves discarding awards and plaques in protest against the police handling of the case. Notably, even pro-government bloggers, usually silent on domestic issues, have spoken out against the incident. In another case this week, the government in Zhengzhou's airport economic zone seized land from several villages, offering what residents called unfair compensation. Two female university students distributed flyers urging villagers to resist, leading to a confrontation when police moved in. Over a hundred villagers surrounded the police cars in protest. Veteran journalist Yan Chuanguo says these incidents mark a significant shift in public resistance against the CCP. He notes that the Qingdao incident, though small, shows how a local issue can quickly escalate into a nationwide protest. Chinese veterans have protested before, but usually for personal gains. This time, they had no direct benefits and were driven by political demands, indicating a shift from economic grievances to political ones, a potential threat to the CCP system. Meanwhile, the leaflet incident shows intellectuals are starting to ally with the grassroots, as seen when the two students organized farmers to resist. Mr. Yan believes these events suggest that the anti-CCP movement in China is entering a new phase. For years, analysts have argued that the CCP has relied on economic growth for legitimacy since the 1989 Tiananmen Square protests, trading prosperity for political stability. If the economy falters, some say the CCP might seek new ways to legitimize its rule, such as pushing for the unification of Taiwan. However, political commentator Wu Guoguang offered a different perspective in a recent podcast. Wu argues that economic growth is a false premise for legitimacy, noting that Xi Jinping did not come to power by proving his economic competence, and the Chinese people have never been able to choose their leaders. Mr. Wu explains that the CCP's rule is based on compliance legitimacy, where people accept leadership not because they support it but because resisting is too costly. As the economy worsens, dissatisfaction is bound to rise. But the key question is whether it will reach a level that threatens the regime's legitimacy or Xi's personal rule. Without action, even widespread discontent won't pose a real challenge. Mr. Wu emphasizes that he is not calling for mass protests, acknowledging that the time for such action has not yet come. Instead, he urges individuals to reflect and reshape themselves, rejecting all aspects of communist values and culture. Wu argues that if everyone changes, the Chinese people will no longer be the compliant citizens the CCP relies on, and that could be the real hope for China's future. Leaked recording exposes corruption in China's education system. Deputy director takes bribes from meat to money. A leaked recording going viral online has shed light on deep corruption within a small county's education system in China. In the recording, a man who identifies himself as Xiao Su, apparently a kindergarten administrator, admits to bribing his superiors and describes how he has been extorted for bribes by them. Xiao Su explained that due to budget constraints in the Binzhou development zone, the education funding application platform was set to limit the increase in student numbers reported each year to no more than 50% compared to the previous year. This appears to indicate that funding is distributed based on headcount. Last year, Xiao Su's kindergarten reported 69 students, but this year, the number jumped to 170, about 2.5 times the previous count, leading to their application being blocked by the system. To resolve this, Xiao Su paid Principal Li 40,000 yuan, about $5,600. Principal Li then took the matter to Director Liu of the local education bureau, who eventually approved the application after some maneuvering. Over the past two years, Xiao Su says he paid a total of 80,000 yuan, about $11,200, to Principal Li, in two installments of 40,000 yuan each, about $5,600. In return, Principal Li provided some compensation, allocating 50,000 yuan, about $7,000, in maintenance funds to Xiao Su's kindergarten and covering other expenses with public money. However, Xiao Su's main complaint centers around Zhang Jun, the deputy director of the education bureau. According to Xiao Su, Zhang Jun demanded bribes even in small forms, such as taking vegetables from the kindergarten and once asking for 20 pounds of ribs. On another occasion, Zhang requested two sets of gifts, which Xiao Su delivered directly to his office out of frustration. Zhang also took a case of wine from Xiao Su and demanded a loan of 2,000 yuan, about $280, which Xiao Su settled with a 500 yuan, about $70, gift card. When asked why Zhang Jun remains in his position despite his behavior, Xiao Su explained that many want to see him removed, but he is protected due to his close ties with Director Liu of the education bureau. Zhang Jun, however, does offer some perks to those who bribe him, such as tipping them off about upcoming inspections or advising them to review what other places are being inspected for an advance. According to Baidu Baiqi, Zhang Jun is indeed listed as the current deputy director of the Binzhou Economic and Technological Development Zone Education Bureau. The revelations in Xiao Su's recording are not isolated incidents in China's education sector. In recent years, corruption has been rampant, with cases of professors sexually assaulting students, students bribing teachers, systemic fraud, and the buying and selling of academic papers becoming common. New York's spy case sends clear warning to CCP agents and U.S. government. The arrest of Linda Sun, former deputy chief of staff to the New York governor, for spying on behalf of Beijing has sparked major concerns about CCP infiltration in U.S. government circles. Sun was arrested by the FBI on Sept. 3, and a day later, it was revealed that the New York Chinese consul general had left his post, coinciding with Governor Kathy Hochul's request for his expulsion. Experts say this case should serve as a strong warning to Chinese Communist Party agents operating within the U.S. government. The Department of Justice indicted Sun on 10 counts, including violations of the Foreign Agents Registration Act, FARA, visa fraud, money laundering, and accepting benefits to promote the interests of China and the CCP. Her husband, businessman Christopher Hu, was also charged with multiple crimes, including money laundering. According to the DOJ, Sun acted at the request of CCP officials, engaging in various political activities that favored the PRC and the CCP. These included blocking Taiwanese representatives from accessing New York state officials, altering state messaging on issues important to the CCP, and arranging meetings between PRC delegations and state officials without proper authorization. Sun allegedly received substantial economic and other benefits from the CCP for these activities. Sun, a naturalized U.S. citizen originally from Nanjing, China, had worked in the New York state government for about 15 years, including as chief of staff to then-Assembly member Grace Meng and later as deputy chief of staff to Lt. Gov. Kathy Hochul. Analysts say the case underscores the broader infiltration efforts by the CCP within the U.S. government. Wang Huntao, chairman of the National Committee of the China Democratic Party, emphasized the importance of focusing on those within the U.S. government who act on behalf of the CCP, calling for increased crackdowns by U.S. law enforcement. Commentator Tang Jingyuan noted that while most CCP spies previously arrested by the FBI were community leaders or posed as democracy activists, Sun's case is particularly concerning because of her high position in the U.S. government, which allowed her to influence state policies and diplomatic relations. Meanwhile, U.S. State Department spokesman Matthew Miller clarified that the departure of New York Chinese Consul General Huang Ping was not an expulsion but the result of a routine rotation. Huang had served as consul general since November 2018, and his term was expected to end this year. Experts believe the U.S. chose not to expel Huang to avoid retaliatory measures from China, aiming instead to keep the focus on the infiltration case. Taiwanese retired Major General Yut Sung Chee suggested the U.S. opted for a low-key approach to this serious intelligence breach. According to Huang Huntao, the CCP's United Front Work Department, rather than the consulate, plays a central role in directing overseas espionage activities. He indicated that Beijing maintains tight control over agents, often making it difficult for U.S. authorities to gather evidence. This case has highlighted the extensive reach of the CCP's spy network within the U.S., serving as a stark reminder of the ongoing threat and the need for vigilance against foreign influence in government roles. 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.