China Enters Garbage Time! Manufacturing Engine Has No Orders, Even Loyal Indian Buyers Stop Coming

There are no orders in November, none in Guangdong and none in Jiangsu, Zhejiang or Shanghai either. Even the Indian customers we've worked with for years aren't coming anymore. Full-hole warehouses and sheet metal processing equipment worth tens of millions of yuan, and now there's no interest at all. Oh, you found that you found that I want me to find out. Our factory has put us on leave again. Again, it's so hard. Making a living as a worker this year is so hard. I didn't expect business in November to be worse than in October. So many orders have been cancelled, so many workers are off work, and so many are still waiting to hear back. They don't even know whether there'll be any work. Manufacturing, long a vital source of income for China's economy, is now caught in a structural crisis at home and abroad. Over the past several decades, a huge labor force and extensive supply chains helped China become the world's factory. But sharp changes in conditions at home and overseas have brought serious challenges. Domestic demand is saturated and profit margins are severely squeezed, while geopolitical pressure abroad is forcing supply chains to relocate. The CCP's Official Manufacturing Purchasing Manager's Index for October was 49.3, according to figures released on October 31. It fell 0.8 points from September, dropping back below the 50-point line, separating growth from contraction. China's Non-Manufacturing Purchasing Managers Index, or NMI, also fell, declining 0.5 points from September's 50.2 to 49.7. Both the PMI and NMI use 50 as a dividing line. Reading above 50 indicates expansion and improving conditions. Readings below 50 indicate contraction and a Mainland China's manufacturing PMI had risen from 49.2 in July to 49.8 in August and 50.1 in September, suggesting a gradual recovery. But October's sharp decline wiped out almost all the gains from the previous two months. The figures also show slowing supply and demand in manufacturing. October's production index fell 1.9 points to 49.8, While the New Orders Index dropped 1.1 points to 49.4, Business professor Xie Tian at the University of South Carolina Aiken said the figures show that the reality of China's economic decline is becoming increasingly difficult for the CCP to conceal. Even fabricating the data is getting harder. He said the manufacturing outlook for China's economy is already very bleak. The economy continues to decline, and its prospects may become even worse. In fact, many ordinary people have already realized that China cannot continue developing this way. If things keep going this way, we'll soon see the kind of milk dumping that happened in capitalist societies. Yesterday, I watched someone's video showing goods piled up like mountains in warehouses. Every industry has excess capacity, but they're still busy producing. Wages haven't gone up in more than 10 years, and people's spending power can't keep up. Selling abroad amounts to dumping. Other countries aren't stupid. They'll protect their own markets and introduce trade barriers. A lot of local owners have closed down, and there are a lot of people knocking on their doors. A lot of business owners have gone under. There have been especially many failures this year. Frankly, there's no way forward if we keep developing like this. We're going backward. That's right. I'm telling you, a lot of ordinary families are desperately poor now. They can barely survive. Shops are struggling to stay afloat, and many business owners are going under. In non-manufacturing, the service sector's Business Activity Index fell 0.2 points from September to 50.0 in October. The construction sector's Business Activity Index dropped 2.3 points to 48.0. Many people say consumer spending is weak and shops can no longer stay in business. This is the underground mall of Gongbei Kouan. This is the underground shopping mall at the Gongbei border crossing. Look at these shops, they're all empty. Look at the business now. It's already 10 o'clock, and this whole row of shops still hasn't opened. I'm one of the early ones, one of the hardworking ones. Back when business was good, people opened a little after 7. How difficult is it to have a physical store now? That's how hard it is for physical stores now. This street looks sick. There isn't a single customer. There may be more shop owners outside than customers, so it's hard to keep a physical store going now. The night market in Changsha is all shut down. The economy is bad. Look, row after row, they've all gone out of business. Storefronts for rent. I read travel guides online, and this place was supposed to be really popular, but so many shops are closed. Online, they call it Changsha's most popular night market. It's nothing like that now. I feel misled. This is Huafa Coast in Shenzhen. It used to be packed. Now look at it, deserted even on holidays and weekends. It's frightening. It's basically just our big family here. Downstairs, there are barely a handful of people. Such a huge shopping mall. Such a large space. It's really frightening. Professor Sun Kuo-hsiang in the Department of International Affairs and Business at Taiwan's Nanhua University said China's slowdown has gradually spread from real estate to manufacturing, services, and construction activity. Sun stressed that China has long relied on investment and exports to make up for weak domestic consumption, but both growth engines now face challenges. High-tech manufacturing is still growing, but not enough to lift traditional industries and consumer spending across the board. He said this means China faces more than a short-term economic fluctuation. It faces structural problems caused by excessive reliance on expanding production, inadequate household spending power, and a property market adjustment. Huafa Group, a major state-owned company based in Zhuhai, China, has acquired large amounts of land for development in Shanghai over the past few years. Quality problems at several projects have triggered major protests by homeowners demanding that their rights be protected. Huafa. Huafa, Huafa, get out of Shanghai. Disputes over pre-sale home contracts have become frequent as the market declines and delivery deadlines approach. Homebuyers sued Huafa Industrial over a presale contract dispute in November 2026. The case was filed in Shanghai's Minhang District Court. The company is Huafa Group's publicly listed subsidiary. Founded in 1980, Huafa Group has ranked among China's top 500 companies for many consecutive years Zhuhai State-Owned Asset Supervision and Administration Commission is its controlling shareholder and ultimate controller. News recently emerged of a debt crisis involving more than 400 billion yuan in interest-bearing debt, overdue trust products, and extensions on bank loans. Its bonds have faced selling pressure, and its credit rating has been placed on negative watch. Zhuhai is putting up 100 billion yuan, equivalent to 2.5 years of fiscal revenue, to rescue its flagship state-owned company, which has no way out. The head of Zhuhai's state asset commission told the media on November 4 that more than 40 billion yuan was already in place. Nearly 70 billion yuan more in resources would be mobilized. Zhuhai's regular annual fiscal revenue is only a little over 40 billion yuan. The city plans to commit more than two years of fiscal revenue to rescue a single company. The government also planned that same day to spend 181 million yuan to buy back a parcel of island land from Huafa. A financial vlogger said rating agencies had also placed Huafa's bonds on negative watch, showing that the company was already on the brink while its government owner prepared to cushion its fall. After all, Zhuhai state assets authorities hold a controlling majority in Huafa, which oversees development across large parts of the city. Its creditworthiness has long been tied to Zhuhai's. As of November 2026, Huafa Industrial has posted a loss of 6.4 billion yuan for the first three quarters of 2026. Several trust products had missed scheduled payments. Zhuhai State Assets Commission was urgently mobilizing more than 100 billion yuan in resources to contain the crisis and provide relief by buying and holding assets. Even so, the financial pressure has left homebuyers deeply worried that its Shanghai projects could face downgraded features and standards, construction delays, or even work stoppages that leave homes unfinished. Several construction workers sat beside a scale model in the sales A sales office lobby at Huafa Zhuhai Bay on October 31 demanding unpaid wages. Guofa Group's total assets stood at about 723 billion yuan at the end of September, with a debt-to-asset ratio of 75.36%. China Lianhe Credit Rating described its debt burden as very heavy. It also noted that inventory and investment properties together accounted for more than 45% of total assets. The company faces pressure to turn assets into cash and repay short-term debt, and its cash holdings provide weak coverage for debt due within a year. Huafa's troubles have begun affecting mainland China's credit bond market. Bloomberg reported on November 2 that yields on three-year corporate bonds rated AAA by ChinaBond had recently risen eight basis points in a single day, one of the largest increases in two years. Related credit spreads widened. Risks also spread from Huafa to bonds issued by Zhuhai's local government financing vehicles, then affected Tier 2 capital bonds and government bonds. The concern surrounding this volatility extends beyond Huafa's own debt repayment pressure. It also raises the question of whether risks are spreading more directly among local state-owned companies, local government finances, small and medium-sized banks, and the bond market. China's broader property crisis continues to deepen, showing that a new round of government rescue measures in August failed to revive the market. Nationwide property development investment totaled 5.3 trillion yuan from January through September, down 20.6% from a year earlier. Residential investment fell 20.5% to 4.1 trillion yuan, a steeper decline than the 18% drop in the first half. Developers had about 60.8 billion square feet of floor space under construction, down 12.8%. Completed floor space fell 25.1% to about 2.5 billion square feet. Sales of newly built commercial properties totaled about 6.08 billion square feet, down 13.2%. Official figures show that nationwide revenue from land sales fell 27.9% from a year earlier in the first three quarters of this year. The decline highlights the worsening impact of the property slump on local government finances. Huafa's troubles could trigger a fiscal crisis in Zhuhai. Meanwhile, the Hongqin Bonded Zone, once one of the city's showcase developments, has effectively become an unfinished project. It sits next to the Macau Special Administrative Region. The once highly praised Hengqing Garden, how has it developed after a few years? Hengqin's backyard was hyped so much. Years later, it hasn't developed nearly as well as planned. Look at it now, a whole pile of unfinished buildings. The Bonded Zone was promoted with every grand promise back then. Hengqin's backyard, integrated development, a central business district, all of that. The vlogger said many developers bought land there at the time. Zhuhai introduced home purchase restrictions in 2019, limiting buyers from outside the city to homes and apartments in Hengqin. Apartment prices peaked at more than 1,850 yuan per square foot. A few years later, these properties had lost more than half of their value, falling to around 465-560 yuan per square foot They are extremely difficult to sell, with owners unable to find anyone willing to buy. Several vloggers said Hengqin and Zhuhai looks attractive on the surface, but is effectively a ghost city. Hengqin's development is now in serious trouble. Look at this. There are serious problems with Hengqin's development right now. Look at the wide roads, the new high-rises, the beautiful surroundings. You'd expect this place to be bustling. But spend a few days here and one word sums it up, deserted. It feels like a city with a skeleton but no flesh and blood. It hasn't fully come to life. It's true that you have no one left; there's no need for us to argue that, everyone can see it for themselves. I don't need to argue about how empty it is this year. Everyone can see it. When you first enter Hengqin, the city's appearance amazes you. Wow, the quality of construction is every bit as good as in top-tier cities. It really looks better than many other cities. But once you go around Hengqin, you realize there are really very few people. Its registered population is only 46,000. I hardly see anyone. Many people online have been discussing how unfinished buildings are everywhere in Zhuhai. Hi. That building up ahead is unfinished. And this one over here is unfinished too. That one over there is unfinished too. Oh, this one is unfinished too. Look, work has stopped on this building too. And there's no construction happening on that one either. I'm in the pitiest part of the sea right now. I'm standing in the part of Zhuhai where buyers have been burned the worst. Look at this development. At its peak, prices were above 2,790 yuan per square foot. Now, even at just over 930 yuan per square foot, nobody wants it. It's all unfinished. This is Zhuhai's biggest stalled housing development, built to take advantage of people from outside the city and drain their money. Even the traffic lights here aren't on. This road was only half built before they stopped. Look at all these high-voltage power lines. A lot of the roads just end like this. Look at these homes. Nobody lives in them. If I didn't say so, who would believe this is the afternoon? You would hardly believe it without me telling you. This is Zhuhai Airport, Jingwan Airport. At 6 in the evening, there's nobody here. The state of Zhuhai, a designated special economic zone, is a snapshot of China as a whole. Unfinished projects can be found across the country. Murotown, a European-style castle development in Xinyang Economic Zone in northern Yancheng Jiangsu province, received heavy publicity around 2019 and 2020. Promoted as a joint project between local authorities and Italian partners, it was billed as the first international intellectual property-themed cultural tourism park, with total investment of 600 million yuan. It stalled before it ever opened. There isn't a single person here, Everywhere you look, things are damaged. But apparently, the interiors were all finished. Look, there's another large castle-like building on the side. With some redevelopment, this could be a pretty good place even just for filming short dramas. The original plan was quite good, and the place is pretty big. You could tell the paved bricks were very good quality. After all these years, almost none are broken. There are just weeds stubbornly growing through the gaps. A park like this could have worked well in another city. The point is, everything inside was already fitted out – tables, chairs, stools, even tea rooms. It was all ready, and they just left it sitting unused. Chinese media reported that the company developing and operating the project ran into serious funding problems midway through construction. The entire project has been stalled for five or six years. The European-style castles, theater streets, and other buildings designed to resemble historic European architecture were largely built at the time and looked impressive from outside. But tenant recruitment, interior work, and operations never kept pace, so the park never officially opened to visitors, not even for a day. Today, only unfinished shells remain. Some nearby residents have even cleared surrounding land to grow vegetables. It has become another cautionary example of blindly investing in major cultural tourism projects. For years, local governments in China used local government financing vehicles as intermediaries to borrow money they could not conveniently borrow themselves. Banks were happy to lend. The Chinese Communist Party's years of massive infrastructure spending produced strong-looking GDP figures, while leaving local governments heavily in debt. The CCP issued a directive in August 2025, requiring all local government financing vehicles to exit their financing role and complete their transformation by the end of June 2027. Under crushing debt pressure, the Party was effectively being forced to reserve a decades-old model of funding local governments through land sales. But it was already too late. The move also reflected a lack of options after three years of unsuccessful attempts to rescue the economy. A financial work report released by the People's Bank of China on November 5 said the number of remaining financing vehicles nationwide had fallen 92% by the end of September compared with the end of March 2023. Outstanding financial debt related to business operations had also fallen 79% by the end End of June compared with the end of March 2023. However, CCP authorities did not explain that their debt resolution efforts merely reduce interest pressure and extend repayment periods. In practice, a substantial share of debt restructuring by local governments and financing vehicles involves issuing local government bonds to replace or repay earlier bank loans, non-standard financing and old debt. This does not fundamentally eliminate the total debt burden. Instead, it may turn some short-term or high-interest debt into longer-term government or state-owned company debt, both on and off the books. Figures from the CCP's Ministry of Finance shows that outstanding local government debt nationwide reached 59.9 trillion yuan at the end of August 2026. That excludes vast amounts of hidden local government debt and debt from business operations at financing vehicles and other companies. The IMF estimates that the broader debt of China's local government financing vehicles had ballooned to 71.4 trillion yuan by the end of 2025. Commentator Zhao Pengbo said problems once concealed by growth are now surfacing one after another. The CCP has also lost the tools that previously drove growth most effectively. He described this as a period of prolonged economic decline under the CCP's system. Rapid economic growth once concealed many problems. Local governments could rely on later growth to absorb losses from bad investments. They could count on future fiscal revenue to cover expanding debt. Population growth and urbanization could increase the use of ever-expanding infrastructure. Now, however, demographic trends have reversed. Urbanization has entered a new stage, and returns on traditional investment are approaching zero. Zhao Panbo said this period of prolonged economic decline means that the old growth model no longer has the conditions it needs to function, while the cost of maintaining it keeps rising. He said the CCP can still introduce policies, expand investment, order banks to lend, and tell local governments to boost the economy. Economic figures may also rebound in response to stimulus. But none of this changes a basic fact. The Party once concentrated resources to drive growth. Now it must commit even more resources simply to sustain the economic and social systems built over the past several decades. Stock markets reflect the state of an economy. Confidence in China's market is weak and stocks have fallen for more than a month, leaving investors distressed. The CCP announced market rescue measures on the evening of November 2. These included a third round of central bank swap facility operations, broader participation by financial institutions, and lower swap fees. The measures allow financial institutions to exchange assets for high-quality central bank assets to obtain funding to buy stocks. The stocks opened lower and kept falling the next day. Despite official efforts to lift prices, the market still closed down. China's A-share market opened sharply lower on November 6 and fluctuated weakly, with all three major indexes falling. The Shanghai Composite closed down 1.1% at 3,649.18. More than 4,700 individual stocks declined during that session. Singapore's Lianhe Zaobao cited Shen Meng, executive director of Changsun and Company, and Xie Dongming, head of Asia Macro Research at OCBC Bank. They said the CCP's market rescue policies address symptoms rather than underlying causes, cannot change market fundamentals, and may even backfire. Sam Conrad, an investment manager at Jupiter Asset Management, said Chinese stocks have been among the world's worst performers over the long term. He said the company believes China's economic system prevents economic growth from translating into earnings growth. The CCP announced on October 19 that GDP had grown 4.5% from a year earlier in the third quarter, together with previously announced growth of 5.0% in the first quarter and 4.3% in the second. That put growth for the first three quarters at 4.6%. However, some Western analysts estimate that China's full-year GDP growth will be between 0% and 3%. For example, Capital Economics estimates third-quarter GDP grew at 2% using its own model. The research firm's model draws on extensive data that are difficult to manipulate, including Including intercity passenger traffic and industrial electricity use. The US research firm Rhodium Group estimates China's GDP growth this year at around 0%. Its analysis argues that growth of 4.5% is impossible given weak retail sales growth and a sharp decline in fixed asset investment. Xie Tian said these challenges to the official figures reveal the true state of China's economy. They match what he sees. The economy is actually contracting. The CCP has also continued to falsify unemployment data. Official figures released by the CCP in October put September's nationwide urban unemployment rate at 5.2%, down 0.1 percentage points from August. The average for the first three quarters was 5.2%, unchanged from a year earlier. Authorities presented this as evidence that employment remained generally stable. The figure again sparked widespread disbelief because it sharply contradicted other official figures showing continued increases in both the number of people receiving unemployment benefits and spending from the unemployment insurance fund. Official CCP figures show that 5.57 million people in China were receiving unemployment insurance benefits by the end of 2025, a record high. That was more than double the 2.6 million receiving benefits during the pandemic in 2021. An increase that occurred in just four years. Nationwide unemployment insurance fund spending surged to 88 billion yuan in the first five months of this year, the highest total for that period since 2013. Spending in May 2026 alone reached 17 billion yuan, close to the record high set during the pandemic lockdowns in May 2022. Vice Dean Zhu Tian, at the China-Europe International Business School in Shanghai, wrote in September that the CCP's official unemployment rate has little practical value as a reference. Scholars at Tsinghua University estimate China's broader urban unemployment rate At 10.2%. At this labour market, one employer is looking for workers and a group of women crowds around him looking for work. That's the situation at the labour market now. These markets are packed with migrant workers. This is Guangzhou, underneath a bridge. This isn't a tourist attraction or an outdoor recreation site. These are food delivery riders and people working away from home. Here they don't have to pay rent or utility bills, so they can save a lot of money. Trying to support a family really isn't easy, folks. There are also a lot of unemployed people here. British author James Crabtree said after recently completing a two-week visit to China, that That the overall economy was far worse than he had imagined. The divide in China's K-shaped economy is widening, technology industries are growing rapidly, while real estate, investment, and the job market remain weak. The late Chinese economist Gao Shanwen, known for speaking frankly, said in a public speech in 2024 that later went viral that urban employment in China had fallen by a cumulative 47 million while rural employment had risen by 41 million. He believed most of those who lost urban jobs were migrant workers who returned to the countryside. A smaller number stayed home and stopped actively pursuing work or took odd jobs. The 41 million who returned to rural areas We're no longer counted in the urban unemployment rate," Xie Tian said the CCP falsifies both economic data and history, using new lies to cover old ones and maintain the stability of its rule. Without the economic growth it promotes, the legitimacy of its rule would come into question. He said the Party's greatest fear is that its rule, sustained by violence and lies, could suddenly collapse one day when the truth becomes clear.