Nor is a full-blown financial crisis likely. Major banks are state owned, and will not be allowed to fail. There are no complex, opaque chains of intermediation that characterise the western banking system. Foreign creditors to Chinese property developers will have to take a massive haircut, but the ripple effect on the international economy is likely to be limited.

This gets at what most westerners never understand about China: that the market sector, while large, is fully embedded in a planned economy, and that it answers to the dictates of the plan. This means that whenever the market goes haywire (as markets will tend to do), the government can simply step in and say, “yeah, no, we’re not doing that.” A few rich people will lose their shirts – risk of the job if you want to be an entrepreneur – but most people’s livelihood’s, and the economy as a whole, remain unaffected.

This happened in 2015, when the Shanghai stock market crashed (our favorite goons in Washington and Davos may have had something to do with precipitating it): the Chinese government simply let it be known that anybody attempting to short sell would be arrested and imprisoned. Essentially, China is not a capitalist country, and most of the people who keep predicting China’s collapse are simply not cognizant of that basic fact – why? Because they all have economic degrees from Harvard, and so they don’t understand economics.

what a weird way to say housing is becoming more affordable in China

Guess what part of the economy gets seized next?

“The cost of housing in Hong Kong is too high, China is bad.”

“The cost of housing on the mainland is too low, China is bad.”

Thus wrote the China experts before driving to lunch on streets lined with homeless people.