There is one thing the Chinese Communist Party fears more than anything, instability.
Significant turbulence in the Chinese economy is sure to increase citizen restiveness. Xi and his party would like to avoid such troubles.
The problem fundamentally however is that in an economy that is built on top of layers of cronyism and obfuscated prices such as China’s, it’s only matter of time before the fault lines become apparent. We’ve seen a couple of economic tremors in China over the past decade, but one feels that the “big one” could hit at any time.
Fast forward to today, when Beijing may be starting to sweat because whereas Chinese property developers usually count on September and October to be their “gold and silver” months for sales, this year has turned out to be different. As the SCMP reports, not only were sales figures grim for September, but the seven-day national holiday last week also brought at least two “fangnao” incidents – when angry, and often violent, homeowners protest against price cuts offered by developers to new buyers.