NIALL FERGUSON: Evergrande’s Fall Shows How Xi Has Created a China Crisis.

“The regime which is destroyed by a revolution is almost always an improvement on its immediate predecessor,” wrote Alexis de Tocqueville in “The Old Regime and the Revolution.” “And experience teaches that the most critical moment for bad governments is the one which witnesses their first steps toward reform.” I often thought of that passage as I watched Gorbachev inadvertently destroy the Soviet Union by trying to reform it. Only recently did it occur to me that it might also apply to Xi, the anti-Gorbachev. Although his reforms go in the opposite direction from Gorbachev’s — turning back the political clock to Marxism-Leninism, rather than forward to liberalism — the effect may be the same.

Xi’s crackdown on the property developers is just the latest blow he has struck against “capitalism with Chinese characteristics.” First in line were the big tech companies — Alibaba Group Holding Ltd., Tencent Holdings Ltd. and ride-sharing leader Didi Global Inc. Then it was the turn of the for-profit education sector. All of this reflects Xi’s conviction that China needs to move from “fictional growth” to “genuine growth,” and his determination to make the old CCP slogan of “common prosperity” a meaningful antidote to the rampant inequality of the “get rich quick” era. Investors who have ignored this anticapitalist turn in China have only themselves to blame if they have lost money.

While I doubt Evergrande will bring Xi down with it, Xi’s economic clampdown doesn’t look much like a sign of strength.

This is a longer piece, technical in places, but as is usually the case with Ferguson it’s thought-provoking and worth your time.