China’s Economy Is Collapsing And Here’s Why You Should Worry

Gordon G. Chang is the author of The Coming Collapse of China and Nuclear Showdown: North Korea Takes On the World and is an expert on China and China-US Relations. He lived and worked in China and Hong Kong for almost two decades as Counsel to the American law firm Paul Weiss and earlier in Hong Kong as a Partner in the international law firm Baker & McKenzie. His writings on China and North Korea have appeared in The New York Times, The Wall Street Journal, the Far Eastern Economic Review, the International Herald Tribune, The Weekly Standard, and the South China Morning Post. Additionally, he has appeared on CNN, Fox News Channel, CNBC, MSNBC, and Bloomberg Television. Outside the United States he has spoken in Beijing, Shanghai, Hong Kong, Seoul, Singapore, Tokyo, The Hague, Vancouver, and Taipei. He has served two terms as a trustee of Cornell University

By Gordon Chang

Chinese ruler Xi Jinping has staked his rule on making China larger by annexing neighbors, so Taiwan is not his only target. He needs success to assure a precedent-breaking third term as the Communist Party’s general secretary, but the Chinese people, preoccupied with a failing economy, are in no mood for their leader’s aggression.

We start with the Party’s storyline that the relaxation of COVID-19 lockdowns is leading to an economic revival. (RELATED: CHANG: Biden Administration Is Handing Space To China On A Silver Platter)

Don’t believe it! The ongoing downturn is not merely the result of disease-control measures. The most fundamental problem is that Xi has been reversing reforms and re-instituting strict state control. He is a totalitarian at heart.

The second-most fundamental problem is that China is carrying a staggering load of debt. The Bank of International Settlements estimated that the country’s debt was equal to about 290% of the gross domestic product in late 2020, and there has subsequently been a rapid accumulation of indebtedness, during the pandemic. When adding the so-called “hidden debt” and deflating GDP to minimize the effect of inflated official reporting, the country’s ratio is now around 350%.

The debt, however large it may be, is distorting the economy, especially the crucial property sector, which accounts for about 30% of GDP. Home prices are declining country-wide, but, more worryingly, sales volumes are plunging. Home sales fell 34.5% in the first five months of this year compared with the same period last year. Property developers are defaulting one after another. One of them, the Evergrande Group, is struggling under $305 billion in obligations.

Banks are troubled. There have been at least six bank runs since mid-April, in Henan and Anhui provinces. There are restrictions on deposit withdrawals elsewhere, including Shanghai, the financial capital. China’s banking system is showing the strain of an economy that looks like it is contracting.

Investors are fleeing. The bond market in May recorded its fourth-straight month of outflows as investors chased higher yields in the U.S. The Chinese central bank cannot match the Federal Reserve’s rate hikes because higher rates in China would push the economy deeper into the red. The renminbi, not surprisingly, is trading at its lowest level in 20 months.

Beijing cannot expect others to come to the rescue by buying Chinese products, as they did in 2020. The world, unfortunately for the party, is headed into recession or worse. It will be a “calamity,” Charles Ortel of the “On the Money” podcast tells me. As he notes, “Not since the OPEC oil shock have global economic conditions been so unsettled.” With trends moving against Beijing, the world’s next great economic crisis will almost surely be China’s.

Why should we care? For decades, the primary basis of legitimacy of the Communist Party has been the continual delivery of prosperity. Now, because of the accelerating downturn, the Party’s only remaining basis of legitimacy is nationalism.

Chinese foreign policy since 1949, when the Communist Party came to power, has had one overarching goal: the maintenance of Party rule. Therefore, the world should expect Beijing to engage in even more nationalistic behavior to justify its existence.

In fact, the Chinese Communist Party is increasingly belligerent. The Chinese military, for instance, violated sovereign Taiwan airspace in February and in late May intercepted and damaged an Australian reconnaissance plane in international airspace over the South China Sea. This month, General Wei Fenghe, the defense minister, made threatening public comments directed against the United States during the high-profile Shangri-La Dialogue, a security conference in Singapore.

Yet these Communist Party aggressors face a fundamental problem, something evident from their unwillingness to come clean about battlefield losses. It took them eight months to admit they had suffered four dead from a sneak attack they launched against India’s forces in June 2020 in Ladakh in the Himalayas. Chinese officials, according to both Indian and Russian estimates, undercounted the dead by a factor of 11.

The skittishness of the regime suggests its leaders know that the Chinese people, suffering from an economic downturn, are in no mood for another military misadventure abroad. A combined air-sea assault on Taiwan, even if successful, would result in massive Chinese casualties.

Xi Jinping, however, wants to march on neighbors, so peace in Asia depends in large measure on whether the Chinese people are able to restrain him. The millennia-old contest between China’s rulers and its people has never been more consequential.

Gordon G. Chang is the author of The Coming Collapse of China. Follow him on Twitter @GordonGChang

China’s Not So Free, Money Trap

This short video explains how China is building its New Silk Road via its Belt and Road Initiative.

The New Silk Road is also called the Belt and Road Initiative. It links countries in Europe, Asia, and Africa together. The plan was initiated by Xi Jinping, President of the People’s Republic of China. The New Silk Road focuses on investment for railway, highway, and port construction. Click Here for more detail on this subject.

Totalitarianism: Can it happen in America?

What does totalitarianism look like?

In the 20th century, it took the form of secret police violently silencing anyone who spoke out against the government.

Now, it is being presented to us with a different face — But one we should be very wary of just the same.

Rod Dreher, author of Live Not By Lies, explains in this PragerU video.


Here’s the good news:

The secret police are not coming with guns to take you away to a prison camp in a frozen wasteland for speaking out against the government. They did that in Communist countries in the twentieth century. It’s not going to happen here in America or in Western Europe.

Here’s the bad news:

The secret police aren’t coming for you because they don’t have to. There are ways to shut you up and keep you quiet that don’t involve physical force. The powers that be—and that now includes major corporations, the educational establishment, the media, and the government—can just kick you off the Internet, put you on a no-fly list, and bar you from using the banking system.

We can describe scenario number one as hard totalitarianism and scenario number two as soft totalitarianism.

There are big differences between them, but in the end, you arrive at the same place—submission and silence.

To grasp the threat of totalitarianism—hard or soft—it’s important to understand exactly what it means.

According to the famous political scholar Hannah Arendt, a totalitarian society is one in which an ideology seeks to displace all prior traditions and institutions, with the goal of bringing all aspects of society under control of that ideology.

The state literally defines and controls reality. Truth is whatever the rulers decide it is.

These rulers might say something like…

Men can have babies.


Skin color is more important than character.


The American Revolution was fought not for freedom, but to protect the colonists’ slave interests.


Those who resist a vaccine mandate are enemies of the people.

And insist that you not only believe it but affirm it.

If you don’t, you might lose your job, your business, and your good name.

That dystopian future, of course, is now. And, we’re only at the beginning of this process.

Where does it lead?

To less freedom—that much we know.

Again, no guns, no violence—we just go along. Nobody kicks the door down. We open the door and invite them in.

The more information the government has about you, and the more the tech sector can see what you’re doing and saying online, the easier it is to monitor your behavior.

How long before the government creates a digital profile of each citizen?

And how would the government use that profile?

It might go like this:

If you do socially positive things—as defined by the government—nothing really changes. You can do whatever you want. Maybe you’re even rewarded for good behavior—a faster internet connection, preferred medical treatment, or even the best seats at a concert. If you do socially negative things—again as defined by the government—you lose privileges. You’re pushed to the margins of society. You become a non-person.

Sound far-fetched?

It shouldn’t. It’s happening right now in China.

It happened in Russia and Eastern Europe not that long ago. Talk to anyone who lived behind the Iron Curtain, and they will tell you we are headed down a dangerous road.

“No,” you say, “It can’t happen here—in the land of the free and the home of the brave.”

I wouldn’t be so sure.

Ronald Reagan famously observed that freedom can be lost in a single generation. That’s because the human inclination is not toward liberty, but security.

Freedom is a value, not an instinct.

It entails personal responsibility and risk. Security requires little risk and little personal responsibility. So, it comes with little freedom.

That’s why every new generation must be taught the supreme importance of freedom and develop the strength of character to maintain it.

Of course, the people who want to take away our freedom say they’re doing it in the name of compassion—for the many victims of oppression.

Unlike the Bolsheviks of the old Soviet Union, the left of today’s America gets its way not by shedding blood, but by shedding tears.

Don’t be fooled. The objective is always the same—submission and silence.

So, how do we stop the drift toward soft totalitarianism? This is not an easy question, but we can create a base from which we can start to act.

Let it be this:

You may not have the strength to stand up in public and say what you really believe, but you can at least refuse to affirm what you do not believe.

You cannot overthrow this soft totalitarianism on your own, but if enough of us find within ourselves, our families, and our communities the means and the courage to live in the dignity of truth, no matter what it costs, we can keep America free.

Otherwise, we will learn how easy it is to become a totalitarian country—soft or hard.

I’m Rod Dreher, author of Live Not by Lies, for Prager University.

Facts and Sources:

Totalitarianism led to the deaths of more than 100 million people over the last century.

Over the course of the last century, totalitarian regimes caused the deaths of over 100 million people. In the Soviet Union alone, more than 20 million Soviet citizens were put to death by the communist government or died directly as a result of its repressive policies.

View source

A U.S. report on the internal workings of the Soviet Union details the degree to which Joseph Stalin’s communist regime used totalitarian tactics to control citizens: “By the time the Great Terror ended, Stalin had subjected all aspects of Soviet society to strict party-state control, not tolerating even the slightest expression of local initiative, let alone political unorthodoxy. The Stalinist leadership felt especially threatened by the intelligentsia, whose creative efforts were thwarted through the strictest censorship; by religious groups, who were persecuted and driven underground; and by non-Russian nationalities, many of whom were deported en masse to Siberia during World War II because Stalin questioned their loyalty.”

View source

Related video: “Is Communism Moral?” – Dennis Prager

View source

Totalitarian society seeks to displace all prior traditions and institutions to bring all aspects of society under control of one ideology.

As renowned political scholar, Hannah Arendt explained, a totalitarian society is one in which an ideology seeks to displace all prior traditions and institutions, with the goal of bringing all aspects of society under control of that ideology.

View source

The totalitarian Chinese government has suppressed its citizens since the Chinese Communist Party seized control in 1949. The government is now creating a digital profile of individuals and companies for its “social credit” system. Those deemed by the government to have engaged in socially “negative” behaviors are to be placed on various blacklists and lose important privileges.

View source

Russia and Eastern Europe during Joseph Stalin’s totalitarian regime saw similar oppressive systems.

View source

Related reading: “Live Not by Lies” – Rod Dreher

View source

Soft totalitarianism controls people through political and cultural institutions rather than physical force.

In the U.S., major corporations, the educational establishment, the legacy media, and the government are using soft totalitarianism to control society, including limiting the ways people are able to voice their views and distribute information on the internet. Big Tech is increasingly blocking access to social media platforms, marginalizing and silencing individuals and entities.

View source

Big Tech has partnered with banks to bar people for their views. The Heritage Foundation highlights a few notable examples: “Wells Fargo made the ‘business decision’ to close 2020 Republican Delaware Senate candidate Lauren Witzke’s account. Two of the more prominent digital payment services, PayPal and Stripe, have also become active cancel culture participants. PayPal has admitted to closing accounts flagged by the Southern Poverty Law Center in 2019, now, PayPal has announced a partnership with the left-leaning Anti-Defamation League to focus on ‘further uncovering and disrupting the financial pipelines that support extremist and hate movements.’”

View source

Airlines have also blocked people from flying based on their views and alleged behavior. In January 2021, Alaska Airlines banned 14 supporters of former President Trump for what the airline deemed “unacceptable” behavior.

View source

Ronald Reagan famously observed that freedom can be lost in a single generation because the human inclination is not toward liberty, but security. Freedom is a value, not an instinct, and it entails personal responsibility and risk, while security involves little of either.

View source

Leftist institutions in the U.S. use soft totalitarianism to enforce left-wing ideology and political agendas.

Leftwing ideology is increasingly dominating the culture, promoting and enforcing radical views, including about sex and gender.

View source

Radical leftist racial theory teaches that skin color can be more important than character.

View source

The New York Times’ “1619 Project” seeks to rewrite American history to make slavery and racism its defining elements. For example, the project claims that the American Revolution was fought not for freedom, but to protect the colonists’ slave interests. That claim and several other central claims in the leftwing project have been discredited by distinguished historians.

View source

During the Covid-19 pandemic, left-leaning media policed what kinds of information about the virus and mitigation strategies, like mask-wearing and vaccines, were allowed on the internet.

View source

Those who resisted mask and vaccine mandates were villainized, silenced, and even threatened with the potential of losing their livelihoods.

View source

Political leaders and activists in the U.S. pushing to trade freedom for more government control claim they are doing it in the name of compassion for the many victims of oppression.