As transport hack and a bargain hunter, I've been checking and testing Chinese commercial vehicles in "Sêfrika" since 2002.
Back then, I pointed out on national radio in South Africa that those Chinese hoods cover a lot of old but proven ICE engines, which helped to make Chinese vehicles so cheap that even I ended up buying a new Changan mini-van. Back then I also praised China's focus on advancing batteries and evees, especially the BYD company.
But then I went to China as a guest of GWM.
I was struck by two things: The many old men doting on fat little dogs (up to then I thought fat little dogs mostly got eaten in China); and the lack of babies or grannies for these old men to dote on instead.
Coming from Africa where swarms of unplanned children are the norm and having had to dodge the many baby strollers pushed by teenage moms in Croatia, Beijing was by comparison childless.
I was also struck -- the expensive way -- by what Chinese consider to be good business practice. In short, getting the better of your clients, staff, employer and business partner through some form of deceit is simply considered being good in business. It is nothing personal, in fact, the loser is expected to smile ruefully and plan better or haggle harder next time.
This means for government officials, bankers and bosses of any stripe, skimming off the top is just how it has been done since the time dragons roamed. And if you happen to be at the bottom of some trade with no top to skim off, you cut the corners, hollow out the inside or simply take the money without doing the job. This is the Chinese way.
McCarthy Toyota learned this lesson in the early 2000s, when the wheels came off, literally, during the South African media launch of Chinese light commercial vehicles.
Export factories will close
Poorer and wiser about doing business with Chinese, I have since opted to observe this fascinating country from afar, especially their twin problems of few babies and many pensioners. This is uncharted territory, with demographers and economists all wondering what will happen when the opposing graphs finally cross on a spreadsheet.
I'll put my prediction here:
It will result in the closure of car export factories in China before 2030.
These closures will happen despite proposed increases to the retirement ages and the dead-in-the-water idea to sell locally the goods made in all export factories. This is because these factories are fake business that are not required to make things profitably. Instead, they get subsidies if they show rising employment and sales numbers.
The Chinese bosses use every trick in the book to show such numbers, as can be seen from the vast fleets or "dealer-sale cars" dumped in fields and left to the mercy of the weather. CCP officials know all sales reports are fiction. The citizens know this and so do Westerners who've been there.
But after their irrational two-year lockdown killed off the economy, the CCP will now endorse any fake number that saves face on paper. They will also do anything to make it look like the economy is on the up.
Bonus prediction: famines
Which brings me to my bonus prediction: Social media will report food shortages and even famine sweeping over large parts of China in 2024. This is because of a drought that has left major factories powerless and fields bare, on top of which major wheat supplier Russia has its own problems. Predicting a famine is not rocket science -- just look at this year's harvest.
The CCP did and has decreed more wheat and rice must urgently be grown everywhere. And because this is China, CCP apparatchiks have been ripping up plantations, orchards, vineyards and potato fields, all because these crops are not the wheat or rice Beijing said must now be grown. These young thugs have clearly forgotten about the famines that resulted from such agri-sabotage during Mao's regime.
So, to drum home the three main drivers of "modern" China's coming implosion: their business practices are based on deceit, their ageing population are seeing more deaths than births, and they are ruled by clueless but ruthless apparatchiks who will fake any number and undertake any irrational activity that makes for a good report to the boss, up to and including attacks on their main export markets, or sending up the odd spy balloon.
Caveat emptor
All of which leads me to now declare, let the buyer beware when considering getting a Chinese-brand vehicle that is still made in China. And let the buyer consider very carefully before buying Chinese company BYD, which has moved its evee factory to Thailand, but still relies for a large part of its supply chain on factories in China.
To repeat, all Chinese factories are built on a deeply corrupt business culture and a fake economy which is crumbling fast, driven by CCP policies that have made living for the young pointless and for the old, impossible.
And with plummeting fertility rates around the world, there is nothing anyone can do to change things back to the good old days of forced growth on the back of the CCP printing more money than USA and Japan combined. And especially not after millions of Chinese lost all their savings in the $13 trillion Ponzi scheme that is China's housing market (and a big chunk of China's GDP).
Nor will the dreams to change the regime come true. Thanks to the Chinese culture of cheating, the CCP became deeply rooted through a pervasive system of patronage and nepotism. Hence corrupt officials will remain in gatekeeping roles in China for decades yet, even if the party falls and Xi gets "disappeared".
What comes next?
China's future looks grim on all fronts, but it will likely not be as bad as the 1959 famine. For as the derelict factories and empty towns in southern USA, eastern Europe show, the shit will not suddenly hit the fan so that preppers can start a quick rebuild on the ruins of the previous kleptocratic regime's ashes. Living in the failing state that is South Africa, I witness how, once the subsidies stop, things slowly start to fall apart. In place of a TSHTF moment, the fan slowly stops turning because of sporadic or no electricity; and more sewage seep out from manhole covers because of non-functioning sewerage works.
In China's big cities, this slow decay means the gates these CCP apparatchiks keep, will soon see very little traffic and they will face more competition for the shrinking pie from other officials as well as from new leaders in the 55 ethnic minorities. These 55 small tribes can't abide the ruling Han tribe and will find and use every opportunity to escape their control.
But China's rural poor will prevail -- this is what Chinese people do best -- and thanks to industrialisation, they have now seen ways to live other than serfdom. Left to their own, these crafty people will immediately recreate their regional agriculture-based economies. Ironically, this could put into practice the "local circulation" decree Xi Jinping has made in the hope of keeping China's export factories working.
Expect such hyper local economies to all be subsistence economies, like that of Georgia (the country, not state) where potatoes have been barter currency since the end of the WWII. But subsistence economies cannot keep the export factories open.
See also: You Can Buy Almost Anything with Potatoees.
See also: The history of edible currencies.
The bottom line, nothing now can save China's modern export industry. As above video shows, it has already started to collapse.
So, when you compare the heavily subsidised and therefore very good value that DongFeng and FAW trucks; Changan, JMC and GWM pick-ups; and Baic or Chery passenger cars are offering right now against the German, Korean or Japanese brands (all three these countries also face their own demographic collapses and over-geared vehicle industries), do ask yourself: What happens when the subsidies end (as all subsidies do) and the Chinese factories close?
Will you be able to sell the vehicle to another clueless buyer before then? Or will you try to find parts support from anywhere -- if such services can still be bought for any money?
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| When you drive quirky old cars made in failing countries, get a spare for parts. |
As an owner and collector of the fugliest but most ergnomic car ever made in Italy (another country with an ancient history built on appearances, but one which is a bit further down the road to industrial and demographic ruin which China is following) I know this pain.
But for my part, I'll keep investing in the one mode of transport that can run on cold-pressed plant oils and for which legacy factories are still making parts: old diesel drivetrains.
