Real estate giant China Evergrande will be liquidated

When I was little it was still married-with-children by default, probably at relatively young age, and people had to decide not to have children. That was in part helped by the lack of widespread use of contraceptives. The norm in my primary school was two or three kids per family. I remember only one classmate with no brothers or sisters. Of course zero children families were not represented in there.

Now the default is single-no-children and you have to make an explicit choice to marry (you used to be nudged into it by society) and to have kids, by stopping to use contraceptives and to do all the things that long time singles are used to do.

Cost of housing, living, parenting is also an issue but I think that the default mindset is more important and sets the conditions for higher general costs: if on average people can spend all their money for themselves, the society and the market adjust and people who have to spend time and money also for kids are at a disadvantage.

If the default is changing in China too, their population is going to shrink no matter what.

Property speculation keeps prices high, and people paying off mortgages in dead-end jobs. Education costs force parents into difficult decisions to move out of HCOL areas where they likely have higher-value jobs. Energy and Water costs spike while providing no societal benefit.

The West is obsessed with keeping these in place, the rising East seems better placed to change economic inefficiencies. Not sure how it'll play out but I feel like Western society is being pillaged by the PE crowd who can take advantage of the above.

One thing investors should always be clear about with the CCP - as a foreigner you will always be screwed over if it benefits the CCP. The CCP is extremely hostile, even having strained relations with other Communist Countries [1].

> After two years in limbo, and with over $300 billion in debt, Evergrande was ordered by a judge in Hong Kong to liquidate, a move that will set off a race by lawyers to try to find and grab anything belonging to Evergrande that can be sold.

This will not pay out foreign holders of I.O.U.'s, because of this:

> There isn’t a lot left in Evergrande’s sprawling empire that still has value. And any assets that are valuable may be off limits because property in China has become intertwined with politics.

I hope this is a lesson to investors.

I ultimately feel sorry for the people who invested into housing and who are now stuck with mortgages they must continue to pay despite having no property. T

> Financial markets in mainland China and Hong Kong — a city that has for years been an entry point for foreign investment — have received such a blow that officials are scrambling to find policy measures like a stock market rescue fund to shore up confidence. On Sunday, they moved to stop short selling, a practice that allows investors to bet against a stock.

The CCP over-stepped and took Hong Kong, which should still be under partial UK control and therefore an attractive entry for foreign investment. The CCP caused foreign investment in Hong Kong to be withdrawn and got this ball rolling.

This is just the beginning. Almost all provinces in China are now broke and the economy has taken a very significant down-turn. Property is one of their largest investments and I am not aware of a financially good developer operating in China. There appears to already be talk of restrictions on bank withdrawals to prevent a run on the banks.

[1] https://en.wikipedia.org/wiki/Sino-Soviet_relations