You’ll never be Chinese

Although none of Mark’s anecdotes, criticisms and foreshadowing will be new to those following the China bears, it’s still an altogether engaging farewell lament that went viral for good reason. Sober Look points out that an expat exodus is a leading indicator of weaker economic growth, and with China accounting for 40% of the world’s GDP growth that’s no small concern.  For Mark and other bears an unwinding of the real estate bubble seems the most likely trigger to bring about economic contraction and potentially severe social unrest:

Once you’ve purchased the necessary baubles, you’ll want to invest the rest somewhere safe, preferably with a decent return—all the more important because one day you will have to pay your own medical bills and pension, besides overseas school and college fees. But there is nowhere to put it except into property or under the mattress. The stock markets are rigged, the banks operate in a way that is non-commercial, and the yuan is still strictly non-convertible. While the privileged, powerful and well-connected transfer their wealth overseas via legally questionable channels, the remainder can only buy yet more apartments or thicker mattresses. The result is the biggest property bubble in history, which when it pops will sound like a thousand firework accidents.

In brief, Chinese property prices have rocketed; owning a home has become unaffordable for the young urban workers; …

When the bubble pops, or in the remote chance that it deflates gradually, the wealth the Party gave the people will deflate too. The promise will have been broken. And there’ll still be the medical bills, pensions and school fees. The people will want their money back, or a say in their future, which amounts to a political voice. If they are denied, they will cease to be harmonious.