The price of a commodity is not equal to its actual value.
Previously, only goods that met basic human needs had corresponding value. However, with the increase in productivity, more and more needs beyond basic requirements have been discovered.
The prices and values of goods are gradually becoming distorted.
Some goods that were originally valuable may lose their value.
Both the demand and supply sides will face a complete restructuring.
In such a situation, the original balance can be broken in an instant under the action of a powerful external force.
"The sharp drop in American tech stocks will almost certainly drag down the entire American stock market, thereby affecting global stock markets."
We are not immune either.
Because we and America are highly similar in industry, the only difference lies in the target audience of internet companies and the technological content of semiconductor companies.
Although our residents' wealth is more concentrated in real estate compared to America, social security funds and healthcare funds are also heavily invested in the stock market.
China's social security fund began investing in the A-share market a long time ago. The social security fund was established in 2000 and entered the Chinese stock market in 2016.
Over the past two decades, the social security fund, amounting to trillions of yuan, has achieved an average annualized return of over 8%.
That's quite an impressive achievement.
In 2022, the National Healthcare Security Administration (NHSA) also announced the establishment of a fund to enter the A-share market. By 2031, the size of the NHSA fund entering the A-share market will exceed one trillion yuan.
"Our social security fund and medical insurance fund together exceed five trillion yuan."
Such a large amount of capital could suffer massive losses in market value due to stock market volatility.
This only applies to social security and medical insurance funds, as well as funds like the National Integrated Circuit Industry Investment Fund (Big Fund for Chips) and equity controlled by various state-owned financial enterprises, all of which will incur losses.
This could very likely result in significant losses and could absolutely trigger a stock market crash.
A stock market crash is inevitable.
The sharp drop in the market value of technology companies does not mean that resource companies can remain unaffected.
With over 90% of the consumer electronics industry shrinking, demand for metal resources such as copper, aluminum, and iron will also decline.
Tourism will also suffer a fatal blow; we estimate that the tourism industry will shrink to one-tenth of its original size.
Resources including petroleum will also experience a decline.
Somewhat like the rise of a whale causing the fall of everything, virtual reality will deal a fatal blow to the vast majority of industries.
The only sector that will thrive is the entertainment industry within the virtual reality field, which will account for 50% of all employment.
Another problem is that without a value anchor to bind young people's labor, the social labor cost will increase significantly.
As a late-developing country, unlike developed countries that can plunder from abroad, the only way for a country to achieve primitive accumulation is through internal 'plunder'.
Although it sounds cruel, describing it as plunder is not an exaggeration.
This was true not only in China, but also in the early stages of primitive accumulation of national capital in the USSR and Japan.
China chose to utilize the price scissors between agriculture and industry to complete its primitive accumulation, which is what we call the urban-rural price scissors.
Agricultural products are purchased at prices that do not conform to international pricing, while industrialized products are priced higher, thus completing the initial capital accumulation from farmers and using this capital to develop the manufacturing industry.
Entering the 21st century, China, having completed its initial capital accumulation, invented a second method to bind young people to the future workforce: real estate.
Real estate mortgage loans are for thirty years, which means that the consumption power of young people for the next thirty years is tied up. This consumption power is then nationalized and the income from real estate is used to develop infrastructure, technology, military industry, aerospace and other fields.
A simple statistic illustrates this: in 2020, China's local land-related tax revenue reached 2 trillion yuan, and land transfer revenue was nearly 8.4 trillion yuan.
Local general public budget expenditures are around 20 trillion yuan, meaning that land revenue accounts for half of the local government's expenditures.
It is precisely land-based finance that allows the central government to increase tax revenue without having to provide excessive support to local governments.
This approach became unsustainable by 2020, and by 2022, the public had realized that the myth of real estate prices only rising for twenty years was about to be shattered.
Between 2022 and 2031, the Chinese government will barely maintain this system by freezing secondhand market transactions and building new urban areas.
However, even so, it still couldn't stop the sharp drop in housing prices in third- and fourth-tier cities and the unsustainability of local land revenue.
However, real estate developers and the media have still managed to create a myth that housing prices in first-tier and strong second-tier cities will continue to rise.
However, the emergence of virtual reality technology will shatter this myth, and the real estate bubble will be completely burst.
The Chinese government has also lost its means of binding young people, and it's important to know that finding similar methods is not so easy.
The urban-rural price scissors gap in the past was a method learned from USSR, while the real estate sector later followed a path that was half borrowed from Singapore and Hong Kong and half forged on its own.
The real estate industry has gradually developed an excellent model for exploiting investors after many years of exploration.
You can choose not to participate in the stock market's exploitative practices, but you're forced to participate in the real estate market's exploitative practices.
However, young people later discovered that if I don't want offspring, I don't have to play this game.
When the real estate bubble bursts and this method is permanently lost in the future, what will be the next way to reap profits from within?
This requires time to think about.
"Virtual reality technology will completely remove the land finance model, which was already nearing the end of its history and had completed its historical significance, from the historical stage."
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