https://www.ft.com/content/ecf7de34-e595-4814-9cbd-4a5119187330Although really, his target seems to be Xi Jinping, as his (paywalled) WSJ op-ed a week after this one makes more clear. As the major funder of most things left-wing in the US and western europe for the past several decades, he's not hostile to Socialism, he's just hostile to how Xi wants to do things. Although it causes an odd moment where he almost agrees with people who never thought they'd be able to agree with him on anything.
Xi Jinping, China’s leader, has collided with economic reality. His crackdown on private enterprise has been a significant drag on the economy. The most vulnerable sector is real estate, particularly housing. China has enjoyed an extended property boom over the past two decades, but that is now coming to an end. Evergrande, the largest real estate company, is over-indebted and in danger of default. This could cause a crash.
The underlying cause is that China’s birth rate is much lower than the statistics indicate. The officially reported figure overstates the population by a significant amount. Xi inherited these demographics, but his attempts to change them have made matters worse.
One of the reasons why middle-class families are unwilling to have more than one child is that they want to make sure that their children will have a bright future. As a result, a large tutoring industry has grown up, dominated by Chinese companies backed by US investors. Such for-profit tutoring companies were recently banned from China and this became an important element in the sell-off in New York-listed Chinese companies and shell companies.
Something some of the people I follow are missing on this(and Soros does as well), even as they help "fill in the details" on things at the same time. Much of that "large tutoring industry" that was shut down? It centered largely around tutoring in foreign languages. Why is that important?
Nearly all of those tutors were foreigners. Even more significant,
foreign language tutoring comprises nearly 60 percent of the long-term visas granted to foreigners living in China. No employment, no work visa. No work visa? You need to leave the country. This is a backdoor means of expelling a large number of foreigners from their country. (Although, to "be fair" those tutoring jobs are also a prime place to put spies. Kids "hear things" and tend to echo them elsewhere, and if mom or dad is a ranking party official, or a high level manager in the right kind of company..)
While that is also going on, a number of Chinese nationals who have been living abroad on work/marriage/other visas in foreign nations are also getting a nasty shock of their own if it has come time for them to renew their passports. Passport renewals are being denied. No passport? Can't (legally) leave the country. And if your passport is expired, you can't legally stay in the country you're in either.
Those two things happening concurrently is ominous enough for me on their own. But you throw in the economic problems he led with, as well as wide reporting among expats currently in, or recently returned form China about how the Communist Party has
greatly ramped up appeals to Nationalism and militaristic imagery lately, and well..
Let us continue with another piece of the FT op-ed Soros wrote:
Xi does not understand how markets operate. As a consequence, the sell-off was allowed to go too far. It began to hurt China’s objectives in the world. Recognising this, Chinese financial authorities have gone out of their way to reassure foreign investors and markets have responded with a powerful rally. But that is a deception. Xi regards all Chinese companies as instruments of a one-party state. Investors buying into the rally are facing a rude awakening. That includes not only those investors who are conscious of what they are doing, but also a much larger number of people who have exposure via pension funds and other retirement savings.
I like how Soros basically calls Xi a fascist without directly saying as much. He's basically describing the Fascist, aka National Socialist, economic model.
But that brings me to what has been a growing concern for me as it relates to China this past year. China has promised its people "constant growth" and has managed to cook its books in various ways over the past 30-ish years to keep that promise. But Covid19 shattered their ability to cook their books much further. Right now, I'm reasonably convinced that the only thing stopping China from doing anything too overt is that they're the host nation for the 2022 Winter Olympics and they're still hoping for a good PR blitz from that like they had from the 2008 Summer Olympics. They probably won't get that, and are likely coming to that realization, but thankfully for Taiwan, it's getting to be that time of year where China trying something is likely to end badly for any amphibious forces they tried to send across the strait, just from Mother Nature doing her thing, no outside intervention needed.
... however, that's off the track from where Soros is trying to go.
https://www.wsj.com/articles/blackrock-larry-fink-china-hkex-sse-authoritarianism-xi-jinping-term-limits-human-rights-ant-didi-global-national-security-11630938728 (paywalled, and I've only seen some summaries from elsewhere.)
Basically, Soros is goes on to say that anyone throwing money into the Chinese market at this point is throwing their money away, and all they're doing is propping up Xi Jinping's leadership of the Communist Party of China. If people would just stop pumping money into China's economy, things would turn south on China's economy quickly, and when the Party meets again next year Xi could be removed from office and more liberal leaders could assert control. At least, that's what Soros believes.
But I'm looking at the "Xi does not understand how markets operate" admission on his part. The other problem Soros has is that Xi has consolidated considerably power directly to himself during his tenure. And if nothing else, I'd suspect those "other party officials" who want Xi gone are open to the following scenario playing out, as it is a potential win-win for them.
Step 1) China's economy has started to contract at a rate they're unable to hide, the resulting "correction" in the market is going to be devastating if left unchecked as all of those foreign loans come due and nobody has the means to service the debts.
Step 2) The Communist Party doesn't want to be blamed for what is about to happen, so they're going to look to blame shift at a minimum.
Step 3) Xi determines it is enough of "a threat to the party" (really, he means himself/his faction in the party) that he decides to capitalize on all of the Nationalist fervor they've been ramping up wildly for the past several years.
Step 4) War is a good stimulator of economic activity. He implements the threat to annex Taiwan, their own propaganda says it should be an easy undertaking for them after all, and Biden's a joke. So they invade Taiwan. (And if China is at war with the nations holding said debts, that provides a great excuse to "take liberties" with said debts.)
(Note: this scenario is not "how I see it" but how I could see them viewing it)
- Their best case scenario, presuming "the button is pushed" in 2022 (very likely given indications of their current economic condition) that means it will be happening during a "mid-term" election cycle in the United States.
If China's Area Denial capabilities work as well as they think they will. Should the Americans get involved, the combat losses sustained in the opening weeks of the conflict should be severe enough "with no real progress" that the American public demands that Biden withdraw our forces from the fight.
Our Congressional delegations, wanting to be re-elected will knuckle under to those demands and force Biden to pull our forces out. (Never mind 2/3rds of the Senate aren't up for re-election in 2022)
With no more American involvement in the fight, China's victory over Taiwan is all but assured so far as they're concerned.
They'll likely suffer from economic sanctions and other more substantial damages from Taiwan's own ballistic missile capabilities and what the Americans (and possibly Japanese) did before they pulled out, but that just means more work for their construction sector, and they can blame all of their economic problems on "the foreigners" who couldn't help but insert themselves into China's "purely internal matter" as it relates to the Rogue Province of Taiwan.
The Nationalist fervor from their "successful reunification" campaign ensures the Party remains in power for a long time to come. Anyone who tries to argue otherwise is "in league with the foreigners" and dealt with accordingly.
But the international sanctions won't last, China is "the world's workshop" after all, so their consumer markets will demand "normal trade" be resumed with China soon enough - Their worst case(for the anti-Xi factions in the Communist Party), the Taiwan invasion fails, and China loses control of its claims in the South China Sea. Economic sanctions are crippling for a time, but once again, they can appeal to that Nationalistic fervor and "blame the foreigners" for all of the problems China has, with the additional icing on the cake being they can also blame Xi Jinping and his associates for the problems as well. Which means they have a perfect opening to carry out a large scale purge of the Communist Party of China. "It wasn't a failing of the party, it was a failing of greedy and corrupt officials in the party."
And anyone who disagrees is either in league with the foreigners, or in league with those corrupt officials, in any case, they'll be dealt with accordingly.
But once again, China is "the workshop of the world" and international sanctions won't last for long, as their consumer markets will demand that sanctions be lifted.
In this case, being a veto holding member of the Security Council also helps, as that means the UN will be unable to impose binding sanctions against China on a global level, so it'll be individual nations deciding when they want to resume trade with China.
Now several of the people I'm following who spent time as ex-pats in China are very insistent that they don't see China ever invading Taiwan in the next couple of decades because they're convinced the Communist Party "knows" it would be the end of the Communist Party if they did so. The invasion would fail, a lot of Chinese sons(and only children at that) would die in the process, which means a LOT of angry parents. Not to mention the loss of face in having launched a failed invasion, and all of the negative economic impacts. But then, they're not considering a scenario where the Communist Party has "decided" that no matter what they do, they're probably going to loose power. People who have their backs to wall, and who have been demonstrated to not truly value human life can do some absolutely evil things that normal people have a hard time conceiving of in advance.
I initially was pretty tentative on anything hitting the fan in 2022, as I've said, this is something I've been suspecting for the past year now. But with Soros starting to openly move against the current Chinese leadership, the writing is on the wall in my book. We're on the path to seeing China initiating a "kinetic war," most likely before summer of next year.
I hope with every fiber of my being that I'm wrong, but China's behavior this past year just doesn't do much to reassure me.
