Chinese Construction Workers Haven't Been Paid for Months

Ju Peng/Xinhua via AP

It's hard for us to understand China, partly because of the very real cultural differences, and partly because China is wholly owned and operated by the Chinese Communist Party (CCP). The CCP has never been forthcoming about the actual state of China's economy, especially where real estate is concerned.

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Those chickens are now coming home to roost. The CCP China's real estate bubble is popping, and the workers who build China's housing are already paying the price.

Workers for a major Chinese developer are going without pay, and job sites are going unfinished as the Chinese real estate market struggles, according to Reuters.

Country Garden, formerly China’s largest real estate developer by sales volume, is in the midst of a debt crisis indicative of the Chinese real estate industry as a whole, according to Reuters. Workers at the Country Garden Yunhe Shangyuan project site on the outskirts of the 14 million-person city of Tianjin are saying that they have not been paid for months and that construction has stopped, leaving sites unfinished.

“They haven’t paid us since Chinese New Year (January). We are all worried,” a worker who stopped working at the Yunhe Shanyuan site last week told Reuters. Workers living in dorms on site said they have gone months without pay.

Country Garden has $191.7 billion in liabilities with 3,121 projects across all of China, according to Reuters. Since the debt crisis began in 2021, companies responsible for 40% of Chinese home sales have defaulted on their debt.

China faces major economic problems that they just can't keep hiding. Youth unemployment is spiking. Not only are the developers not paying their employees, they are also missing payments to their investors. Meanwhile, China - and by China, I mean the Chinese Communist Party (CCP) - has been ordering aircraft and warships to make provocative flights, accompanied by Russian craft, along the Alaskan coast.

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The troubles with China's economy in general and the real estate market in particular has been routinely covered up by the CCP. The state-controlled media, frankly, lies about China's economy. But they can't keep these things under cover forever. News always gets out one way or another. Here's a great example: YouTube vlogger serpentza, who I have featured in writing about China in the past, documented the rise of China's ghost cities a year ago. He brings receipts, with a video of the ghost cities and a detailed explanation of how the Chinese government artificially props up prices. Have a look.

The CCP is also trying measures to shore up the Chinese stock market

The China Securities Regulatory Commission (CSRC) proposed steps including cutting trading costs, supporting share buybacks and encouraging long-term investment to support a stock market (.CSI300) that has slid to nine-month lows.

The regulator said it did not know if there would be a cut in stamp duty, a measure which has been discussed recently but which the CSRC said is beyond its power, falling within the remit of the Ministry of Finance.

Other measures laid out by the CSRC include boosting the development of equity funds, studying plans to extend trading hours, and improving the attractiveness of listed companies.

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These issues aren't unique to China. China and Russia, in fact, share a lot of the same economic troubles. They both have autocratic governments who control not only their economies but also the information that is released about those economies. Both countries face desperate demographic trends; neither Chinese nor Russian people are reproducing at anywhere near the replacement rate. China's real estate bubble is one symptom of the CCP's desperate attempts to prop things up.

Historically speaking, the combination of a country in dire economic straits but in possession of a powerful military tends to end badly, for both that country and its neighbors.

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