Comment by dmix

6 hours ago

They managed okay up until now because the Chinese gov takes a ton of revenue directly from their industry. They have very low income taxes on the public and instead make a lot of money from their huge state companies and investments in their manufacturing, industrial, and tech businesses which are still booming. That helps offset the losses from real estate, which they also make money off from land sales. They act more like a giant bank than one that simply taxes and spends.

But their fiscal deficits have been growing quite a bit, particularly their local governments and they've had some pretty bad deflationary issues recently.