The Journal reports today that there's a nascent revolt of mortgage-holders in China against paying for mortgages on apartments not yet completed by developers. This sounds perfectly rational to us. Very few Americans would even consider paying on a mortgage until taking title to a house upon completion, but somehow that's where they are over there. China has somehow never quite gotten out in front of the overbuilding issue that led to the default of Evergrande late last year. Things have never quite collapsed, but they're always threatening to.
Meanwhile, China has aggressively continued with its Belt and Road strategy to lend on infrastructure projects abroad, also leading to some defaults and regime instability, like what we're seeing in Sri Lanka right now, where China is a non-trivial contributor.
Something must break, eventually. Hopefully, it is Xi Jinping and his new push towards greater and greater central control of everything. China will never look just like us (nor honestly should we hope that it would, it ain't like the US or Europe has it all figured out), but it has had its greatest successes to date when it has pursued strategies of less control and more freedom -- though not without human suffering. But we've never seen instances where unchecked rule by one person over large domains and long periods of time has worked out well.
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