1/6/2023: 2023 Prediction: Civil Unrest in China
Seeds were planted
Well, this is not exactly a prediction. Protests are already happening across China. It started with protests against the zero Covid policy, culminating in the white paper revolution. The zero Covid policy was finally reversed in December 2022. But the seeds of unrest were already planted. Once the Covid surges are over, chances are we are going to see more and bigger protests in China.
Three years of zero COVID policy is putting a lot of financial strain on Chinese people and institutions. Many small businesses went out of business and large companies are downsizing. Before Covid, there were already a lot of structural issues in China but things were under control because their economy was growing rapidly and the middle class people could make a good living and become homeowners. But now, the structural issues are showing consequences. The Chinese real estate sector is struggling after years of overbuilding and over leveraging where a large number of home buyers are stuck with the mortgages on never finished properties. A number of regional banks are insolvent due to corruption and mismanagement and many depositors lose access to their bank balances. The affected citizens are primed to protest for their rights but local governments may not have enough resources to squash these protests as the government deficits balloon and many local governments struggle to balance their budgets.
With the youth unemployment rate at 17% and the success of the white paper revolution, chances are we are going to see more protests in China and potentially escalated civil unrest. The trillion dollar question now is whether CCP can keep things under control in 2023. If so, how? And if not, what will happen to China?