The Writing’s on the Great Wall for a China Crash

As the economy continues to implode, capital flight rises.

A view of a complex of unfinished apartment buildings in Xinzheng city, in China's central Henan Province, on June 20, 2023. Pedro Pardo/AFP via Getty Images

Commentary

As the saying goes, if you want to know what’s really going on, follow the money. That catchphrase doesn’t just apply to foreign companies and investors backing out of China. It also applies to the Chinese economy.

A No-Confidence Vote

In the midst of widespread economic duress and growing social disruption, following the money trail shows how Chinese investors are voting with their wallets. Consumer spending is down, and the savings rate is up. Capital is flowing out of China any way it can, and it all amounts to a definite no-confidence vote for Xi Jinping and the Chinese Communist Party (CCP).

The CCP Tries to Hide the Facts

In true CCP fashion, the state puts the blame for its failed policies on those who point them out. Anyone who mentions the crumbling economy, for example, is guilty of endangering financial stability. Even though the CCP would consider prosecuting journalists and economists who report accurately about the falling employment numbers and the high debt levels that plague local governments, China’s worsening economic conditions are too dramatic and widespread to hide.