HP

🚨 CHINA IS COLLAPSING China’s real estate just hit its lowest level since 2005. The index peaked at 114 in 2021 and sits at 86 today. That is a 25% collapse in four years. Real estate was 25% of China’s entire GDP and 70% of household wealth was tied to property. That wealth is being permanently destroyed. Local governments funded themselves through land sales for decades. That revenue is gone and local government debt now stands at $18.9 trillion. Two thirds of new borrowing is being used just to service old debt. 80 million homes are sitting empty with no buyer in sight. Evergrande collapsed under $300 billion in liabilities and got liquidated. China Vanke is fighting to avoid the same outcome. Beijing has officially declared the old model dead: high debt, high leverage, high turnover, buried without a replacement ready. This is not a housing correction. This is the largest ongoing wealth destruction event in the world right now and Western markets are not pricing any of it in. The second order effects haven’t even started. I’ll make another post later and trust me, you don’t want to miss it. Turn on notifications, this is important. A lot of people will regret not following me.