China is straining at every seam.
Street violence and social fray
Mass knife attacks, arson incidents, and vehicle assaults now appear in state media feeds almost every week. Police scramble everywhere. Citizens film, children run. Chaos feels constant, normal even. In November, an SUV rammed pupils outside a primary school in Changde, injuring several and causing widespread panic【(2)】. Parents screamed, teachers wept openly in the streets. Reporters counted at least a dozen deadly incidents just in that month alone. Earlier coverage traced a rise nationwide in random killings and stabbings, framed chillingly by attackers as “revenge against society”【(1)】.
People are angry, scared, exhausted. Some blame rising tuition prices, others blame mass layoffs. Everyone whispers the same bleak phrase: no future. Authorities scramble to reassure the public, yet reassurance rings hollow and fake.
Factories stall, wallets thin
Orders for low margin exporters have dried up entirely under new United States tariffs. Dongguan plants that once hummed constantly now sit dark, eerie, and abandoned. Owners weigh whether running at a loss is better than shutting the gate forever【(3)】. A Financial Times report reveals similar shutdown waves across Jiangsu and Zhejiang, regions once hailed as China’s industrial backbone, now faltering and struggling【(4)】.
Why so brittle? Because many workshops borrow cash heavily after only a tiny ten percent deposit. Cancelled order equals instant default. Workers dismissed with nothing, some lingering desperately outside gates, holding placards demanding unpaid wages. Beijing understands clearly what unpaid and angry men might do.
Premier Li Keqiang openly admitted back in 2020 that six hundred million Chinese scrape by daily on under five U.S. dollars【(5)】. Four years later, food prices have surged upward dramatically. Wages have remained stagnant, unchanged. Workers skip meals, miss bus rides, cut essentials down to the bare bones.
Property offers no financial cushion anymore. Resale home prices fell another seven percent year on year in April, marking the worst slide since the 1990s【(18)】. Big developer Vanke saw its chief executive reportedly detained in January, shaking an industry already drowning deep in debt【(17)】. Mortgage boycott chat groups, once strictly censored, are quietly surging again. Homeowners openly question, angrily demand answers, but mostly face deafening silence.
Economic data itself is vanishing mysteriously. Entire economic series such as steel output, land sales, and youth employment have been yanked offline or “rebenchmarked,” leaving analysts blind and guessing【(16)】. When numbers hide, trouble looms large.
Lost generation
The official youth jobless rate hit twenty one percent in mid 2023, then the government abruptly stopped publishing it. A recalculated figure still showed seventeen percent in July 2024, and academics argue the real number today would be even higher【(9)】.
Online, thousands of basement dwellers label themselves “rat people,” openly bragging about days spent endlessly scrolling and eating instant noodles in dark, windowless rooms【(8)】. Their cynical motto: scroll, eat, sleep, repeat. They see no point whatsoever in fighting for lengthy mortgages or endless twelve hour shifts. Despair has become an accepted lifestyle, memeable yet profoundly troubling.
Party fears its own citizens
Beijing’s public security budget surpassed the army budget as early as 2011 and continues climbing sharply【(6)】. Cameras, police vans, neighborhood watch apps—every city block becomes a checkpoint. The threat the Party fears most is domestic rebellion. Loyalty questioned, trust eroded, paranoia spreads rapidly. Citizens watch each other suspiciously, wondering silently who might report whom next.
The People’s Liberation Army slips
Purges at the top
April brought another shocking revelation: reports emerged that CMC vice chair General He Weidong had been removed—the first ouster at this rank since the chaotic Cultural Revolution【(10)】. At least seventy eight senior officers have fallen in Xi’s aggressive anti corruption campaign. Officers watch their mentors vanish, nervously wondering who might be next. Loyalty tests grow stricter, careers ruined overnight.
Exercises cut short
The PLA staged extensive drills around Taiwan on April 1–2, then abruptly ended them early. Analysts noticed missing commanders and muddled messages, signs of a force improvising without trusted, clear leadership【(11)】. Troops questioned orders openly, discipline frayed visibly, uncertainty ruled the ranks.
Gear that will not work
U.S. intelligence uncovered missiles filled shockingly with water inside Rocket Force silos, a scandal that helped trigger the extensive purge【(12)】. Satellite images later exposed a brand new nuclear submarine sunk embarrassingly at its pier near Wuhan during critical trials—costly and humiliating【(13)】. Export customers complain frequently: cracked JF17 airframes, radar malfunctions, engine breakdowns are common【(14)】. If foreign buyers suffer, the PLA undoubtedly struggles too.
Recruiting slump
Urban youth strongly prefer tech gigs or delivery scooters over restrictive barracks life. Provincial officials have responded desperately by reviving clauses from the 1984 Military Service Law, forcibly ordering high school and university students into mandatory boot camps【(15)】. Parents protest quietly but fearfully. The desperation for manpower is increasingly clear, morale sinking even lower.
Morale overall? Thin, very thin. Officers regularly fake readiness reports to pass inspections. Soldiers study political slogans more intently than real combat drills. Trust evaporates, replaced swiftly by suspicion and fear.
Why it matters
A fraying society, faltering economy, and nervous army together form a grim picture. Beijing’s grand plans—from projecting power strongly in the South China Sea to deterring rivals near Taiwan—depend heavily on domestic strength. Right now, that critical foundation looks severely cracked.
The world is watching closely, hedge funds especially. So are millions inside China, scrolling mindlessly in dim, rented rooms, anxiously waiting for tomorrow, uncertain what will break first.