China was not known for extravagant Halloween festivities in the past. Now, the entire country is astonished by the massive, colorful processions that have flooded the cityscape of the economic capital with crowds of people in recent days. State media is praising the parade as evidence of the zest for life and growing consumer confidence of an optimistic young population. However, everyone knows that the surprising mass gathering in the city hardest hit by China's strict Zero-Covid policy carried an undercurrent of protest.

Many costumed individuals have subtly transformed the Halloween horror theme into socially critical messages well understood by young Chinese. In addition to anger over the lockdown imposed by Beijing, they express ridicule and disappointment over three phenomena that symbolize China's economic and social challenges since the abolition of Covid restrictions. These include economic pessimism with the weak stock market as a central theme, extremely high youth unemployment that the statistics bureau is no longer willing to report, and the debt crisis of Chinese property developers that is affecting the residential real estate market.

During the festive days in Shanghai, the Beijing leadership held a Central Financial Work Conference that takes place only every few years. This conference is expected to provide guidelines for the financial sector in the coming years. The official statements after the meeting use their usual cryptic language to address obvious pain points. In response to the budgetary mismanagement exacerbated by the pandemic at the local government level, they state that they will "optimize" the debt structure between central and local governments with long-term mechanisms to address financial stability risks. Regarding the real estate issue, Beijing announces that regulation and oversight of property developers, as well as their access to sources of financing, will be improved. Local governments are also expected to stimulate residential real estate demand based on local conditions.

Market participants do not derive particularly optimistic messages from these formulations, let alone signs of solutions to China's property problems that are significantly slowing the economy. In line with this, a new statistic from the central bank reveals that the stock of property loans in China as of September 30 is down year-on-year for the first time ever. This does not bode well for the sector

As chance would have it, the Evergrande Group, symbolizing the debt crisis of property developers, has received another and officially last chance these days to submit a reorganization plan that has been repeatedly postponed throughout the year. Based on this plan, it is hoped that a debt restructuring solution can be found for the dollar bonds with a nominal value of over $20 billion that have gone unpaid for two years. Otherwise, a Hong Kong court may grant a liquidation petition. The showdown at Evergrande has been postponed from October 30 to December 4. This at least prevented the Financial Work Conference from being overshadowed by a bankruptcy bang at Evergrande.

Nevertheless, the silence from Beijing on bailout solutions for Evergrande, which has been ongoing for two years, is deafening. The fact that the Chinese state, which intervenes in the private sector and the capital market in all aspects, is so discreet does not stem from a market-oriented approach but rather from helplessness. In the hope that the economy and the real estate market would pick up on their own after the end of the Covid policies, Beijing seems to have counted on the Evergrande issue being quietly resolved as a sad isolated case without contagion. However, that is not the case.