What if a major Chinese province becomes effectively insolvent?
A major weak province effectively becomes insolvent on combined explicit and hidden debt, forcing Beijing into an explicit bailout that sets a costly moral-hazard precedent and strains the sovereign balance sheet.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A major weak province effectively becomes insolvent on combined explicit and hidden debt, forcing Beijing into an explicit bailout that sets a costly moral-hazard precedent and strains the sovereign balance sheet. The trigger decomposes into signed root‑shocks — China growth ▼ · Credit spreads ▲ · Dollar/reserve confidence ▼ · Recession signal ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.8% hist +0.06–+0.91% · other way +0.29% (n=12) |
| 2 | High-yield credit HYG 📈 chart | Rate | ▼ -0.7% hist -0.91–-0.02% · other way -0.24% (n=12) |
| 3 | Financials XLF 📈 chart | Equity | ▼ -0.6% hist -0.98–+0.03% · other way -0.19% (n=12) |
| 4 | Freeport (copper) FCX 📈 chart | Equity | ▼ -0.6% hist -1.34–+0.23% · other way -0.01% (n=12) |
| 5 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +0.5% hist -0.68–+2.08% · other way +25.2% (n=12) |
| 6 | Copper XCUon Hyperliquid 📈 chart | Commodity | ▼ -0.5% hist -1.36–+0.27% · other way +1.57% (n=12) |
| 7 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -1.0–+0.15% · other way +0.28% (n=12) |
| 8 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.4% hist -0.3–+0.1% · other way -0.09% (n=12) |
| 9 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.4% hist -0.12–+0.28% · other way -3.79% (n=12) |
| 10 | China internet KWEBon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.58–-0.02% · other way -0.26% (n=11) |
| 11 | Alibaba BABAon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -1.4–+2.32% · other way -3.17% (n=11) |
| 12 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.4% hist -0.26–+0.26% · other way +1.08% (n=12) |
| 13 | JPMorgan JPM 📈 chart | Equity | ▼ -0.3% hist -0.91–+0.14% · other way +1.7% (n=12) |
| 14 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.3% hist -4.34–+2.0% · other way +5.1% (n=11) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| KRW KRW | SHORT | -1.1% · 5d -0.0% | 69% | 38 | 0.35 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.6% · 5d -0.1% | 67% | 36 | 0.27 | ✓ matches cascade |
| SMH SMH | LONG | +1.2% · 5d -0.7% ↺ fades | 66% | 39 | 0.27 | ⚠ differs |
| XLF XLF | SHORT | -0.6% · 5d -1.4% | 63% | 39 | 0.23 | ✓ matches cascade |
| CL CL | SHORT | -1.9% · 5d -1.3% | 63% | 39 | 0.22 | ✓ matches cascade |
| US dollar DXY | LONG | +0.4% · 5d -0.1% ↺ fades | 62% | 40 | 0.21 | ⚠ differs |
| JPM JPM | SHORT | -0.7% · 5d -1.8% | 62% | 40 | 0.21 | ✓ matches cascade |
| Volatility VIX | SHORT | -0.3% · 5d +0.7% ↺ fades | 59% | 39 | 0.17 | ⚠ differs |
| SPX SPX | LONG | +0.3% · 5d +0.3% | 57% | 40 | 0.13 | ⚠ differs |
| EURUSD EURUSD | SHORT | -0.6% · 5d -0.1% | 57% | 38 | 0.13 | ⚠ differs |
| XCU XCU | SHORT | -1.0% · 5d -1.2% | 57% | 39 | 0.12 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -4.3% · 5d -3.7% | 56% | 22 | 0.09 | ⚠ differs |
| GBPUSD GBPUSD | SHORT | -0.2% · 5d -0.1% | 55% | 38 | 0.08 | ⚠ differs |
| FCX FCX | SHORT | -0.9% · 5d -1.3% | 53% | 39 | 0.06 | ✓ matches cascade |