Deflated Xi Jinping.

"Prices for goods leaving Chinese factories have fallen year-over-year for 26 consecutive months, dropping 2.5% in September from a year earlier, and there is no sign of them turning up again soon." "The fear is that deflation is becoming ingrained in China. As falling prices sap profitability, companies could postpone investments or shed workers, leading more people to cut back on spending." One problem is that policies are focused on immediate financial risks and another is that Beijing is extending loans and subsidies to factories, leading to more production." WSJ. Chinese tycoons are deliberately devaluing their wealth, wrote Ruchir Sharma. "On Chinese social media, chatter broke out about how corporate tycoons might be competitively devaluing their own stock prices in order to avoid the widening crackdown on excessive wealth." "Since the crackdown began, the number of millionaires leaving China has been on the rise and peaked last year at 15,000." Only 4,300 left India. So, "China has unveiled an ambitious plan to relieve public debt, aiming to turn local governments away from belt-tightening practices that have exacerbated a domestic slowdown." The debt in state-owned companies is hidden in local government financing vehicles (LGFV) and is estimated at 60.4 trillion yuan ($8.4 trillion). ET. In February, Donald Trump promised to "impose tariffs of 60% or higher on Chinese goods in his potential second term." CNBC. He also promised an extra 10% tariffs on China for smuggling fentanyl into the US. Reuters. Early this month, "The United States... launched its third crackdown in three years on China's semiconductor industry, curbing exports to 140 companies, including chip equipment maker Naura Technology Group." Reuters. In retaliation, "China... banned exports to the United States of the critical minerals gallium, germanium and antimony that have widespread military applications, escalating trade tensions the day after Washington's latest crackdown on China's chip sector." Reuters. China is making too many goods for its own consumption and so "Chinese goods head to overseas markets where they kill the local industry due to their ultra low prices made possible by Chinese state subsidies and various other incentives." "With its own market bereft of demand, China is dumping low-priced steel into India where demand is robust. ET. In fact, "China topped a list of 2 countries with over 79% of total 43 dumping cases registered by India this year as the Directorate General of Trade Remedies (DGTR) is conducting an investigation into an alleged damage to the domestic chemicals, glass, metals, fibers and plastic sectors." HT. Things must be so bad that Xi Jinping is getting paranoid. In his early years Xi "consolidated control over the world's largest military by taking down powerful generals from rival factions and replacing them with allies and proteges loyal to himself." Now, because, beset with high unemployment and low incomes people are complaining about "the garbage time of history" (Reuters), so "like many strongman leaders in history, he is increasingly turning against his own handpicked loyalists."  CNN. "Appear weak when you are strong, and strong when you are weak." SunTzu. Xi was strong when he was strong. Now he doesn't know what to do. The beginning of the end?