China suffered major setbacks in 2024. On January 13, the much-anticipated election in Taiwan was won by William Lai who had been dubbed by Beijing as “a separatist troublemaker”. His victory was a rebuke: The Taiwanese landed a you-don’t-scare-us punch at the giant panda next door and China simply took it on the chin. Throughout January, mainland China's stock exchanges declined 6 or 7 percent, and Hong Kong’s fell 12 percent — the lowest levels in years. Then, on January 29, the country’s high-wire financial/real estate saga ended when a Hong Kong judge said “enough is enough” and ordered the liquidation of Evergrande Group with $300-billion loans, equivalent to Singapore’s national debt. The property developer defaulted in 2021 and at that time owned 30 million unsold units across China, enough to house the population of Germany. Another 100 million units, capable of housing 260 million people, had been “bought on spec” with small deposits invested by working-class Chinese in smaller urban centers. The bubble occurred after Beijing allowed people to own more than one home and turned the country into a casino. Bejing so far has been able to duck a “Lehman Brothers” moment, but its debt debacle has taken a toll and is why China has lost prestige and its mojo.
© 2024 Diane Francis
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