It also tightened regulations on the housing market, the main component of Chinese household wealth-dampening consumption and dimming investor confidence. The onslaught began last year, when the party launched heavy crackdowns on the thriving technology and education industries, leading to the sudden layoff of hundreds of thousands of people, especially young people, who made up the majority of both sectors. The unusual eruptions of public rage are not just a result of the party’s failure to keep up its side of the bargain it is also the fact that much of the recent difficulties are the product of erratic, reckless party policies. Taken together, these crises make a mockery of the dictum-current since China began its extraordinary growth in the 1990s-that the Chinese Communist Party offers its people security and prosperity in exchange for political loyalty. In the same month, hundreds of people launched protests in Henan province over frozen deposits in rural banks that risked insolvency. Some have resorted to rare acts of public defiance: In July, tens of thousands of homebuyers staged a mortgage strike over apartments whose construction has been delayed or stalled by a housing sector cash crunch. People who thought they knew how the rules worked are left bruised and betrayed. The migration from countryside to cities used to be a one-way journey this year, jobless migrant workers who ran out of savings have no recourse but to return to the land. A college education, once considered a stepping stone into the middle class, has now become a major contributor to mass unemployment, with youth unemployment hitting 19.9 percent in July.
All around ordinary people, the iron laws of China’s state capitalism that they once trusted are crumbling: The price of housing, believed for decades to keep rising, fell for the first time in six years this spring in more than half of China’s biggest cities.
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