Chinese mega-developer Evergrande group is making waves as it defaults on payments and shares drop by 90 percent. The company, which is embedded across the country’s financial system, may force developers to take over some of the projects to ensure that homes are delivered to their buyers.
If this continues, an economic global collapse will ensue.
According to Jimmy Chang, chief investment officer at the Rockefeller Global Family Office, the company has $300 billion in outstanding debt, If it is not resolved, it will end up needing some deep-pocketed state-owned enterprises to take over.
Stumbling economic power
If China’s economy continues to stumble, it is expected to take down the global economy with it, This is why President Xi Jinping must strike the delicate balance between eliminating China’s debt and maintaining consumer confidence: One wrong move and the country could find itself in both economic and political chaos.
China’s economy has been described by the World Bank as “high growth based on resource-intensive manufacturing, exports, and low-paid labor.” It has largely reached its limits and has led to economic, social and environmental imbalances as well.
Since spring, Beijing has canceled initial public offerings, fined tech companies for antitrust violations, forcibly shut down the for-profit education industry and sent CEOs running out of the country to avoid the government. However, megadeveloper Evergrande started missing payments on its over $300 million debt, shaking global markets.
These convulsions have since woken the world to one grave possibility: Beijing may be willing to allow some of its biggest companies to collapse in a bid to reshape the model that made them a superpower.
The upheaval is expected to span multiple industries and vast swaths of the country, resulting in one big issue: China has no ability to borrow or buy its way out of its current crisis. For decades, it relied on cheap labor and large amounts of debt handed out by government-owned banks to fuel its economic growth.
While it poured money into developments, factories, bridges and other projects, it does not have the actual money people needed to actually use and pay for everything that’s been built. Most of China’s population does not have the income to shift the economy from one driven by state investments to one that is sustained by consumer spending.
Because of this, China is now stuck in a system that is overbuilt and overindebted. It has a $52 trillion property market that is overly inflated: with money that is easy to borrow, real-estate speculation became a way to store and build wealth for its young middle class.
However, with the country forced to deflate the real-estate bubble without bursting it, China has been forced to prepare for a period of slower growth. To make matters worse, it is now facing an energy crisis fueled by soaring coal prices and a population that is getting old with no resources to rely on.
China closing its economy?
Beijing made the dubious choice of closing the economy instead of keeping it open to continue its growth. Under President Xi Jinping, Chinese socialism is reverting to a model not seen in decades, with tighter control over the economy. This is why Beijing has been canceling massive IPOs and level industries. Economists already expect the shift to slow economic growth even more, which could make China’s attempts to transform its economy even more precarious. (Related: Is China on the verge of total economic collapse?)
Charlene Chu, a debt analyst at Autonomous Research, said: “I think Xi is incredibly ideological, and he’s focused on his legacy. He really wants to reshape China and put it on the global stage — and that does require a reset from the way we’ve been doing things previously.”
China’s transition from open markets to state control won’t be easy to manage, but there is much at stake on a global scale: if Beijing fails, it could level the global financial system, slow trade and devastate businesses worldwide The chaos of global businesses losing their faith in the economic giant could lead to social instability, spurring the government to place even tighter grips on society.
In short, Beijing is at an economic tightrope act, and it is trying to replace its economic model with something that is unknown, with the weight of its debt-ridden system causing it to falter.
Watch the video below to learn more about the collapsing Chinese economy:
This video is from the High Hopes channel on Brighteon.com.
Learn more about how China can affect businesses on a global scale at Collapse.news.
Will America-First News Outlets Make it to 2023?
Things are looking grim for conservative and populist news sites.
There’s something happening behind the scenes at several popular conservative news outlets. 2021 was bad, but 2022 is proving to be disastrous for news sites that aren’t “playing ball” with the corporate media narrative. It’s being said that advertisers are cracking down, forcing some of the biggest ad networks like Google and Yahoo to pull their inventory from conservative outlets. This has had two major effects. First, it has cooled most conservative outlets from discussing “taboo” topics like Pandemic Panic Theater, voter fraud, or The Great Reset. Second, it has isolated those ad networks that aren’t playing ball.
Certain topics are anathema for most ad networks. Speaking out against vaccines or vaccine mandates is a certain path to being demonetized. Highlighting voter fraud in the 2020 and future elections is another instant advertising death penalty. Throw in truthful stories about climate change hysteria, Critical Race Theory, and the border crisis and it’s easy to understand how difficult it is for America-First news outlets to spread the facts, share conservative opinions, and still pay the bills.
Without naming names, I have been told of several news outlets who have been forced to either consolidate with larger organizations or who have backed down on covering certain topics out of fear of being “canceled” by the ad networks. I get it. This is a business for many of us and it’s not very profitable. Those of us who do this for a living are often barely squeaking by, so loss of additional revenue can often mean being forced to make cuts. That means not being able to cover the topics properly. Its a Catch-22: Tell the truth and lose the money necessary to keep telling the truth, or avoid the truth and make enough money to survive. Those who have chosen survival simply aren’t able to spread the truth properly.
We will never avoid the truth. The Lord will provide if it is His will. Our job is simply to share the facts, spread the Gospel, and educate as many Americans as possible while exposing the forces of evil.
To those who have the means, we ask that you please donate. We have options available now, but there is no telling when those options will cancel us. We just launched a new GiveSendGo page. We also have our GivingFuel page. There have been many who have been canceled by PayPal, but for now it’s still an option. Your generosity is what keeps these sites running and allows us to get the truth to the masses. We’ve had great success in growing but we know we can do more with your assistance.
Thank you, and God Bless!
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JD Rucker – EIC