# Asset Devaluation

The Great Baijiu Hangover: China’s National Spirit Faces a Brutal Upstream Reckoning

China's baijiu industry is experiencing a severe structural shakeout as base liquor prices collapse to 'soda prices' in judicial auctions. With overcapacity and weak demand, the sector is moving toward an L-shaped recovery that will likely see the continued elimination of smaller, brand-deficient producers.