Beijing Confirmed! Is Xi Jinping Too Ill to Survive a Fourth Term? Calling on Chinese to Donate Collectively, Must Take Taiwan by Year-End Election? Chinese Tycoons Fleeing en Masse, Provincial Finances Out of Control, Little Pinks Snap Back: Even My Family's Pension Is Gone

The video focuses on the decline of local government fiscal revenue in China, the continued growth of military spending, and wealthy individuals facing tax back-payments, discussing the reduction in land sale revenues, the increase in debt interest expenditures, and the pressure on the real estate market. The text also mentions Haiidilao co-founder Shu Ping selling shares, the scale of Hong Kong cross-border wealth management, and Iranian crude oil supplies, while analyzing the impact of these changes on China's investment confidence, social welfare, and foreign competition expenditures.

Video Link:

Full Text:

Do you know? Now it has been confirmed that the Chinese Communist Party's country is following in the footsteps of the Soviet Union. How should I put it? It is on the accelerating path of collapse and bankruptcy, because they said they want to increase efforts to continue expanding business and opening shops in China. Congratulations on your booming business. Of course, if you have more concepts to persuade those Taiwan people who lick the CCP, or your pro-China friends and family, it is recommended that you watch this episode, as it will give you more argumentative persuasion.

Today I don't want to talk to you about whether the CCP has added any more warships, or test-fired any missiles or fighter jets, but rather something else—I think Taiwanese people should understand better: exactly how much money does Beijing have left to play with the United States and Taiwan? Because every day we look at how many missiles, military aircraft, and aircraft carriers the CCP has built, right? And where AI has reached, even though it is distilled from the US; and where domestic chips have made breakthroughs, even though they are once again rebadged TSMC, SK Hynix, or Samsung.

However, these things—fighter jets won't just roll out of the factory on their own just because you shout about the great rejuvenation of the Chinese nation, right? You also wouldn't say that just by shouting and wanting to photograph Peng Liyuan, she would really turn from the wife of the internet celebrity Guan Zhang into the wife of Xi Jinping, right? Chips, AI, robots, aerospace and defense—every single one of them is a money-eating monster, especially tokens.

Now, what I am going to say next are joint reports exposed by major international news outlets and authoritative media in the past few days. For 2026 alone, the defense expenditure announced by the CCP itself has reached 1.94 trillion RMB, which is 6.9% higher than the previous year. Note that this actually proves that in China, local governments are under fiscal pressure, but this does not mean the CCP's military spending will drop. Beijing still places militarism at the highest priority.

Therefore, what we in Taiwan should really look at is not how many ships China has built this year, but whether Beijing can simultaneously expand its military, continue to compete with the US in chips and AI, deal with its failing real estate sector, and handle one final, biggest crisis over the next 3, 5, or even 10 years. What is it? Finally, facing the largest population aging in human history. And population aging means pension and medical issues. Are there young people taking over? Who will support them, right?

Moreover, what is another extreme event that China is encountering right now? In the past, Xi Jinping's family monopoly could acquire large amounts of discounted Iranian crude oil. Shortly after Xi Jinping's visiting trip to the US and return to Beijing, US Treasury Secretary Scott Bessent made a statement saying that Iran's last batch of oil will no longer be shipped to China within two weeks. In other words, this is the last batch.

That is why I say Trump is a tough guy. While Little Pinks were still cheering that Xi Jinping could stand on equal footing with Trump, you had no idea about the massive crisis facing China. The fuel you will use in the future—even if you drive electric vehicles or new energy vehicles, the oil, as well as the fuel for freight transport—is deeply connected to your everyday living costs.

And you know what? Trump posted a photo on Truth Social where Xi Jinping is slightly bowing to him. Why did he post it? Because you Little Pinks always post screenshots where Trump suddenly bows too, claiming he was kowtowing to Xi Jinping, so Trump returned the favor with the same move. That is why they are friends.

Of course, Bloomberg, a more authoritative media outlet, also put out a very interesting survey with a headline something like: China’s newly established tax squads. Do you remember? We talked about it last month. And who are these tax squads targeting now? The money of Chinese billionaires with assets worth hundreds of millions or even trillions. Trust me, Pinks, in a few years, it will be your turn immediately, because once these big shots are harvested, you will be next.

And what is even more absurd? In the past, what were these so-called multimillionaires, billionaires, and trillionaires afraid of? Kidnappers and scam phone calls. Now they are afraid of their phones lighting up with calls from the Beijing tax bureau, the police, or state security. I would rather take scam calls from northern Myanmar.

This time, what Beijing is looking at is no longer just how many houses you own in Shanghai or how much tax your company evaded last year. The rules on individual income tax for offshore trusts sound extremely boring. Simply put, this means wealthy individuals arrange asset management and controls overseas to avoid excessive tax accumulation, inheritance taxes, and all sorts of messy taxes. Actually, this is completely legal and compliant, but it is just that Beijing is now saying: excuse me, because we are short on money, we have to fight for national power, foreign investment and businesses are not working out, and domestic demand is failing too. The money you earned in our country before thanks to our policy dividends, hand it back to me now.

If you are still—listen carefully—a Chinese tax resident, and this is not just targeting people holding passports of the Chinese Communist Party. People like Guan Zhang (the Curator) or Rou Dai, they are too. All Taiwanese are also regarded as people of the Communist Chinese state. Even the US government this time—probably in the past couple of days—officially announced that if you hold a passport of the Chinese Communist Party, as well as being a local permanent resident, commonly known as a Chinese green card, and a Mainland Travel Permit for Taiwan Residents, you will all be considered Chinese tax residents. And if you also have business dealings and companies there—like those companies Rou Dai has in Xiamen and Shenzhen, right? It is only a matter of time, your turn just hasn't come yet.

So congratulations once again to Rou Dai, also known as Peng Liyuan’s son-in-law, because you are harvesting the Little Pinks. You recently leaked that the cost of your mooncakes seems to be only 70 cents, possibly even including the packaging, yet you sell them to people for 70, 80, or 90 RMB. Wow, this is absolute high-tech witchcraft, right? I am putting a question mark here. That basically means you are helping the CCP collect taxes from the Little Pinks, so Xi Jinping will definitely appoint you as the Minister of Revenue in the future, and employee benefits go without saying.

Including what we mentioned last month, there was a Chinese person who applied for a working holiday in New Zealand, saved some money there—just a few thousand New Zealand dollars—and the bank generated a few dollars in interest. And then what? The Chinese tax bureau called up asking: Did you earn interest somewhere? You need to come back and make up that 5% or 20% tax for me. Look, the CCP is now harvesting even ordinary people's overseas dividend money.

So the trouble is not about finding an accountant to sit down and figure out: alright, alright, how much tax do I owe under this new regulation? No no no no no, the bigger trouble now is that having wealth does not mean having cash. For example, take a billionaire with a net worth of 10 billion; he might have 9 billion in what? Company stocks, real estate, trusts, and his valuations. He might only have 100 million in his bank account, and the rest could even be more in debt.

So if you suddenly demand that because of his estimated net worth—since you say 10 billion, we are going to tax you another 20%—he cannot churn out that much cash. He can only sell his house, sell his stocks, pledge his stocks, or go borrow money. And China is short on cash flow right now, have you noticed?

For example, I will give you an instance: Shu Ping, the co-founder of Haidilao, sold her shares in August. Through related family trust structures, she sold about 350 million USD worth of Haidilao shares. The market interpretation is not that you want to take profits, no. The market interpretation is: it's over, who among us would dare to increase investment in China anymore? Because we will all get harvested as leeks, and we will all be hit with retroactive taxes. And this timing happened to coincide with Beijing’s new offshore trust regulations, right? So market confidence suddenly collapsed.

If you look at the timeline alongside the current state of local government finances in China, you will find it very interesting. For the past 20 years, especially since the tax reform under Zhu Rongji, the most useful ATM for local governments has been land. Local governments primarily engage in leasing and selling. In the past, local governments would use such land to borrow money from developers and banks, and incidentally, skim off some of the profits for corruption.

Then, developers would build houses, and ordinary people would take out 20- or 30-year mortgages to buy them, incidentally tapping into traditional Chinese values: you need a house to get married and have children, right? And where should you buy? A school district house. If you buy a school district house, your child gets more credit points, allowing them to get into better 211 or 985 universities, reach the pinnacle of life, marry a wealthy and beautiful woman, become the daughter of a neighborhood office director, or even marry the 'Mother of the Nation.'

In short, developers would recoup these funds and use them to grab the next plot of land. And what would local governments do with this land revenue? Build roads, subways, metro lines, new districts, and the Xiong'an New Area. So you will notice, why are there more and more houses in China, yet the vacancy rate is so high? Why is the vacancy rate in Grade A and Grade B office buildings reaching 20-30% or 40%?

Furthermore, they have a very devious trick: when selling those properties, they hire actors to create a frenzy, and then people who really want to buy think, 'It must be popular if there's a frenzy; it must have investment value in the future,' so they rush to buy. It turns out that after buying, they find only a single-digit number of residents, and the construction is left unfinished halfway through.

This trick worked in the past, but it doesn't work now because the money from foreign orders is decreasing, right? To put it bluntly, it's a lot like that movie 'Let the Bullets Fly'; they have already collected taxes 30 to 50 years into the future. The problem is, the biggest real estate giants in China, Evergrande is gone, right? Country Garden has also fallen into this financial crisis. Since the Chinese real estate market entered this period, developers haven't even finished dealing with the properties they have on hand, so if you ask them to borrow tens of billions more to grab the next wave of land, who are they going to grab it for? There are no foreign, Taiwanese, or Hong Kong businesses left to rent or lease them.

So, of course, they first look at their own bank accounts. In the past, the local government was an ATM that started spitting out money, but now it can't spit out that much, and the money it does spit out has to be borrowed from the Little Pinks first. According to the latest fiscal data released by the Chinese state, in the first 8 months of 2026, the transfer of state-owned land was only over 1.3 trillion RMB, a drop of—guess how much—28.6% compared to the same period last year. But if you compare it to the peak in 2021, the Chinese government is now losing about 4.5 trillion RMB in land sale revenue every year.

Okay, so why do I say China is becoming a bankrupt model like the late Soviet Union? Let me explain in detail the part I didn't finish a few days ago. OK, China's bills haven't gone on a diet, even though its income has. Does its civil service system need to operate? Armed police, chengguan, the military—do you need to pay them? Schools need to open, right? The Little Pinks still need to continue their patriotic education, right? Wear red scarves, right? Social security needs to be paid, right? Local debt interest still needs to be paid by taking on new debt, right?

China's Ministry of Finance shows that in the first 8 months, debt interest payments reached nearly 1 trillion RMB, an increase of 5.4% year-on-year. In other words, while your income is falling on one side, your rigid expenditures are rising on the other.

I think the analogy of the late Soviet Union is worth discussing because when a traditional growth model like China's begins to slow down, decelerate, or even stall, it still refuses to lower the costs of technological and military competition with the superpower that is truly rising again—the United States. You can see from this Trump-Xi meeting that China must redefine: 'Okay, if I want to compete with the US on these things, where will the money come from?' Competing is truly very expensive; which things should be prioritized, and who should bear these costs? This is called structural pressure.

Aren't the costs of competition ultimately borne by the common people? Little Pinks, don't think that because your income hasn't reached the tax threshold, you aren't taxpayers. Every consumption you make, every flow of funds—you are also taxpayers, you should know that. So we in Taiwan should encourage the Little Pinks to continue supporting your Beijing Central government online to compete with the US on AI, chips, technology, aerospace, military, Starlink, and everything else, including Apple phones and Xiaomi phones—you must compete.

And you are really close; wow, a 6-fold foldable phone, with the same degree of folding as the head of the 'Guanzhang' (influencer), that kind of flat and smooth phone—you are about to beat the US, and if you release another one next year, you'll win again. The Little Pinks will go, 'Yes, yes, yes, keep burning money, keep burning money, I'll buy more.'

But actually, will it go bankrupt sooner or later? Wasn't the Soviet Union played into collapse by the US in the same way? So now that we in Taiwan know this, we know how to fool the Little Pinks, right?

OK, back to the point. Since Beijing cannot be discussed today, and local finances across the country are indeed very poor, does that mean we stop doing AI? Impossible. You have to understand that in Chinese society, or rather in this culture, face is always put first. Can chips be stopped? Can the military industry be stopped? Aerospace cannot be stopped, robots even less so, and the modernization of national defense cannot be stopped.

So the real problem becomes: if the money for strategic competition cannot be reduced—you can think of it as a vanity project—will the pensions for the actual people be reduced elsewhere? The pie is only so big, how are you going to divide it? This is a question of distribution, right? Because you haven't created a new pie. The problem lies in this part: you are taking back taxes that were missed in the past, and this is defined by you; perhaps they didn't even evade taxes.

So what I want to tell everyone today is not some gossip or hearsay; it is real. We can understand from this report what kind of structural problems Beijing's finances are experiencing, and they cannot be changed in the short term. And after Xi Jinping returned to Beijing, he flipped through his little notebook again. He can definitely read Chinese, because there is that Romanization, right? He saw another very beautiful place to get money. What place? Hong Kong.

BCG's global wealth data released this year shows that in 2025, the cross-border wealth managed in Hong Kong is approximately 2.9 trillion USD, surpassing Switzerland for the first time to become the world's largest cross-border wealth management center. This BCG unit stated that more than 60% of the scale of Hong Kong's cross-border assets comes from where? It is what they call the mainland, funds from the Chinese Communist Party (CCP) mainland.

Why do they put this money in Hong Kong? Hong Kong is a white glove. Is this money going to be transferred overseas? It is temporarily staying there because it requires procedures, and it needs a white glove to negotiate that money. I cannot let you take it out for nothing; I have to earn handling fees in the middle, the second and third transaction fees.

And here arises a very troublesome problem: taxes can be pursued, but how can investment confidence be pursued? China currently desperately needs private entrepreneurs to reinvest, and also needs wealthy people not to keep moving assets out, and even more so, it hopes that foreign companies will feel that the Chinese government is predictable and that the Chinese government can be democratized.

Look at the comparison over the past few years; Chinese investment is basically moving toward North Korean-style state-owned assets, right? You can see it for yourselves by looking at this data. For example, if China has 20% new investment this year, 18% might be state-owned, and 2% might be private.

So if you suddenly investigate too fiercely and too violently, and the rules come too fast and too urgently, then entrepreneurs will think, why should I make my company in China bigger and stronger, up to 10 billion? In the future, will I be the next Jack Ma? Will I have another special task force just established by you in Beijing to deal with Chen, Li, or Lin, to study my company and see how much money you want to collect from me?

So what really makes the wealthy uneasy might not be just that simple 20% tax, but that they don't know the future. Especially after the Fifth Plenary Session, and after the 21st National Congress, if you still want to continue to compete with the United States, then to what extent will this flexible line of tax collection be flexible? Will it suddenly reach 30% or 40%? Because after the pandemic, everyone has seen that this red line in China is very terrifying.

What we in Taiwan really need to pay attention to next is not because our Taiwanese money is all in Hong Kong, or because we are all doing business in China—except for the fools—but because Taiwan is facing a country that is engaged in long-term great power competition with the United States.

So we see how many warships the PLA has today, but if you want to know about 2030 or even 2035, are they built for competition, or do they truly have combat capability? You have to look at whether their finances, technology, and industry can support such a scale of actual combat systems. Moreover, China's military spending continues to increase this year, which just reminds us not to reach the wrong conclusion that because the data published by local governments in China shows they are poor, and they are under pressure and cannot make ends meet, the PLA has no money. No no no, rest assured, they can eat grass for three years to build up the military. Pensions and retirement can be placed in the second or third tier, or even the last tier, just to keep the strategic competition going. This is what we in the Asia-Pacific region and we Taiwanese should really be concerned about; after all, we are on the front line of the war.

Back to the point, although we Taiwanese are facing this front line, isn't the one suffering the most the group ruled by the CCP? So as we said a few days ago, in the long-term competition between China and the US, what is worth our attention is not who shouts the loudest. This is actually a point worth studying during the Cold War between the Soviet Union and the United States.

What is truly dangerous is not that you suddenly go bankrupt one day, but that every year you still feel you can afford it, so you continue to borrow more debt, and continue to levy miscellaneous taxes and fees on Little Pinks. After you pay every year, doesn't your other spending shrink? What about your medical insurance? I have to fleece your pension money because I want to compete with the U.S. military.

Therefore, what truly determines whether a major power can play the competition game to the end is not just the leader's ambition, nor how neatly the troops can march during a military parade, but whether, when the bills for real estate, local governments, aging population, welfare, military, AI, chips, the Iran issue, the Taiwan issue, and the Japan issue are dumped on your desk, you can still effortlessly say to Trump that we will send one more Pingping to New York to go to prison together with Maduro, and then see if we can exchange it for you Americans allowing us Chinese to continue making money.

Anyway, as for my Pingping, if you in New York are unhappy with me, I can also go to Atlanta to sing and dance alongside the real panda Pingping, right?