China

[Luke]

It triggers people, creates clicks, often its biased or one sided. Hard to find good information, also due to huge language differences. 

[Luke]

Regarding Patent theft, something that comes up often also here on the board: 

 

https://www.abc.net.au/news/2018-09-26/china-is-after-intellectual-property-not-always-illegally/10302424

 

 

 

'The US Government does the same thing'

 

But Professor Greg Austin from UNSW Canberra Cyber said the evidence that information was applied in the marketplace for commercial gain was "very thin".

"The ASPI report puts almost no evidence in the public domain of a significant case where the Chinese Government has stolen commercial information since 2015 and put that to the advantage of a Chinese private sector corporation."

 

For example, he noted, the United States Steel Corporation and Westinghouse, two companies named in the US indictments, have not in fact suffered any commercial disadvantage.

 

"So the picture is not really what ASPI and others are painting — one of decreasing competitive advantage of Western corporations because of what's happening. That's not the reality."

 

Professor Austin described industrial espionage as just a normal part of international relations — practiced by China, but also by the United States, France and Israel.

 

"If you look at the CIA organisational chart, you'll see that two of its four intelligence directorates are involved in scientific, technical and economic espionage," he said.

 

"I'm confident that the Chinese Government continues to engage in intellectual property espionage; I'm confident that the United States Government does the same thing."

 

 

"The bigger policy issue that the US Government put on the agenda in a special report in March this year … was the Chinese policy of pressuring foreign corporations investing in China to hand over their intellectual property … under Chinese law," he said.

 

But Professor Austin said the Australian Government would be better off putting its policy effort into protecting companies from coercion by China, rather than focusing on "the hardly proven cases of cyber espionage for commercial gain".

[zippy1]

China’s exports plunge by 7.5% in May, far more than expected

• Exports fell 7.5% in May from a year ago, far worse than the 0.4% decline predicted by a Reuters poll.
• Imports for May dropped by 4.5% from a year ago — less than the 8% plunge forecast by Reuters
• The decline was so sharp that export volumes are below their levels at the start of the year, after accounting for seasonality and changes in export prices, Julian Evans-Pritchard, head of China Economics, at Capital Economics, said in a note.

https://www.cnbc.com/2023/06/07/chinas-exports-plunge-by-7point5percent-in-may-far-more-than-expected.html

[Luke]

https://slkanthan.substack.com/p/secrets-of-chinas-economic-growth

 

Nice Write up!

[Spekulatius]

4 hours ago, Luca said:

https://slkanthan.substack.com/p/secrets-of-chinas-economic-growth

 

Nice Write up!

LOL, future for China is so bright, you have to wear shades. No mention of energy vampire Xi Jinping, rotten demographics , lousy stock market performance, failing Belt and road , debt, real estate malinvestment, aggressive behavior against Taiwan, US etc and you get separated from  your money when things get nasty etc.

[Luke]

25 minutes ago, Spekulatius said:

LOL, future for China is so bright, you have to wear shades. No mention of energy vampire Xi Jinping, rotten demographics , lousy stock market performance, failing Belt and road , debt, real estate malinvestment, aggressive behavior against Taiwan, US etc and you get separated from  your money when things get nasty etc.

What exactly do you mean by energy vampire Xi? 

 

Birthrates looked rather fine 6 years ago, i am pretty sure if anybody will be able to fix this, its China:

 

 

Where exactly is the Belt and Road ,,failing,,? Can you provide some evidence that it is ,,failing,,?

 

Real estate crisis okay, that happens, have a look in the US in 2008. 

 

Agressive behavior against Taiwan? The US agreed that taiwan belongs to china, then Pelosi with an Airplane flying there...who is agressive here?

 

Getting seperated from your money when things get nasty? What do you mean? Evidence?

 

Good comment from VIC:

 

 

Consider also that chinese valuations are dirt cheap. Baba trading at book value, Tencent at 15x earnings excl investment portfolio. So many bargains out there...

 

https://www.scmp.com/business/banking-finance/article/3173959/chinas-securities-watchdog-renews-call-firms-buy-back

 

CSRC asking businesses for buybacks...

 

You can paint an equally horrible picture for the US, drug epidemic, financial bubbles, huge political conflicts, underinvested infrastructure. 

 

What remains is that China has an incredible track record for developing their country, in many ways its ahead to any country in the world and the train keeps driving...

 

Meanwhile some people think its a corrupt, failed state with no future. Ill take the contrarian bet here. 

 

 

 

Edited June 10, 2023 by Luca

[zippy1]

12 minutes ago, Luca said:

 

 

Agressive behavior against Taiwan? The US agreed that taiwan belongs to china, then Pelosi with an Airplane flying there...who is agressive here?

 

While US "acknowledhes" that China made the cliam that Taiwan is part of China, US never agreed to this claim.
Pelosi is very welcome here in Taiwan.  Like many fellow Taiwanese, I also welcome our friend to visit us.  We can tell who is aggresive here.

Edited June 10, 2023 by zippy1

[Luke]

14 minutes ago, zippy1 said:

While US "acknowledhes" that China made the cliam that Taiwan is part of China, but US never agreed to this claim.
Pelosi is very welcome here in Taiwan.  Like many fellow Taiwanese, I welcome our friend to visit us. 

The agreement, to my information, was the one china policy. Taiwan is part of china and China and the US will stay in strategic ambiguity and neither of them will overthrow the status quo by force, very successful for the last decades wasnt it? Pelosis Visit is provocating because she is a high government official, talked with the taiwanese government etc. Understandable that china gets agressive, right?

 

On the other hand, i wish china would leave taiwan alone and taiwan could finally declare independence and i also understand that taiwanese people dont want to have anything to do with china, the US serves their interests more than china does. 

Edited June 10, 2023 by Luca

[zippy1]

50 minutes ago, Luca said:

The agreement, to my information, was the one china policy. Taiwan is part of china and China and the US will stay in strategic ambiguity and neither of them will overthrow the status quo by force, very successful for the last decades wasnt it? Pelosis Visit is provocating because she is a high government official, talked with the taiwanese government etc. Understandable that china gets agressive, right?

 

On the other hand, i wish china would leave taiwan alone and taiwan could finally declare independence and i also understand that taiwanese people dont want to have anything to do with china, the US serves their interests more than china does. 

US only acknowledged that China made such a claim; US just chose to not to agree or disagree with such a claim.  In other words, US does not hold a position on whether Taiwan is part of China.  US also does not encourage Taiwan to seek independence.

In terms of Pelosi' s visit, actually Pelosi is not even the first sitting US house speaker to visit Taiwan after US established diplomatic relationship with China in 1979.  In 1997, then-House speaker Gingrich visited Taiwan.  China had no reaction to Newt Gingrich's visit. 

China just chose to react violently this time just because it feels it is powerful enough to intimadate its neighbors.  Note that China even shoot mulltiple missiles into Japan's EEZ following Pelosi's visit.

I am not sure whether you realized China sent its navy ships into Japanese terretorial waters 11 times since this February.    

https://www.aa.com.tr/en/asia-pacific/tokyo-protests-chinese-navy-ship-entering-japanese-waters/2917681 

In addition, South Korea just summoned Chinese Ambassador and accused the Chinese ambassador interfering with South Korean domestic politics.
https://www.aljazeera.com/news/2023/6/9/south-korea-summons-china-envoy-over-us-ties-remarks

Not counting Taiwan, the way China is handling its relationship with Japan, South Korea, Philipine and India certinaly does not give me confidence at all.... 

Edited June 10, 2023 by zippy1

[sleepydragon]

I own baba. And it’s obvious to me that Xi’s attitude towards the Taiwan issue is totally different from previous leaders. He likes to quote Chinese history and ancient words. And he probably knows the handful greatest rulers in Chinese history all had great military success.

 

yet the fact they are making all these noises and threats show war is not imminent. In the end, he doesn’t have money to do it. If he does it, the economy is going to crash and that will be the end of his or CCP’s ruling. So I don’t think there will be a war.

[Spekulatius]

Energy vampire and what is Xi is doing to the Chinese economy:

Or Druckenmiller view :

 

 

Edited June 10, 2023 by Spekulatius

[zippy1]

Surveys found 20.8% of potential workers in cities aged 16-24 were unemployed, up from April’s previous record of 20.4%, the government reported Thursday.
https://apnews.com/article/china-economy-unemployment-3add7592860b9e4c16dac588d2d6777e
 

[Andrew Moser]

Just to add on demographics, no one has really been able to solve the declining birthrates in the developed world problem.

Normal pronatalist policies probably help a tiny bit but not enough to stop developed countries from eventually having declining populations (ex migration)...Romania under Ceaușescu increased the birth rate under draconian policies but there was also this... APA.org

 

 

[Spekulatius]

Yes, there is no solution for declining birth rates that China has. A smaller country can solve this with immigration,  it with China size, that’s not possible and in addition, not many people want o immigrate there anwyays. China is basically Japan in 1990 . Real estate bubble, central planned economy ( more so in China than in Japan) government is sclerotic and incapable of change, export oriented with competitive advantages fading.
Looks at Chinas recent inflation numbers - they are low and I think there is a good chance that China sees deflation led by lack of wage growth and deflating real estate. Some that happened in Japan in the 90’s.

There is a good chance that economic growth in China is going to decelerate where they grow slower than the US in my opinion.

 

For example the high youth unemployment is a sure sign of a static/ sclerotic economy. This is a result of Xi Jinping policies which kneecapped the entrepreneurial spirit of the new economy - the layoffs in tech are a result of that.

 

If I had to bet on one thing to flourish in China the next few years, it’s crime and the underworld, but I don’t know how to invest in that one..

[crs223]

8 hours ago, Spekulatius said:

incapable of change

 

 

 

 

[Spekulatius]

25 minutes ago, crs223 said:

 

 

 

 

2014 was the year Xi Jinping took power. It has been downhill since - first slowly and now the negative fallout is having more and more impact.

[Luke]

8 hours ago, Spekulatius said:

Yes, there is no solution for declining birth rates that China has. A smaller country can solve this with immigration,  it with China size, that’s not possible and in addition, not many people want o immigrate there anwyays. China is basically Japan in 1990 . Real estate bubble, central planned economy ( more so in China than in Japan) government is sclerotic and incapable of change, export oriented with competitive advantages fading.
Looks at Chinas recent inflation numbers - they are low and I think there is a good chance that China sees deflation led by lack of wage growth and deflating real estate. Some that happened in Japan in the 90’s.

There is a good chance that economic growth in China is going to decelerate where they grow slower than the US in my opinion.

 

For example the high youth unemployment is a sure sign of a static/ sclerotic economy. This is a result of Xi Jinping policies which kneecapped the entrepreneurial spirit of the new economy - the layoffs in tech are a result of that.

 

If I had to bet on one thing to flourish in China the next few years, it’s crime and the underworld, but I don’t know how to invest in that one..

1. No centrally planned economy

2. Capable of change

3. Competitive advantages rising-->trade wars: 

https://www.politico.eu/article/french-urge-eu-declare-trade-war-against-china/

4. Youth unemployement was at the same levels after 08 in the US, this too shall pass and long term investors can buy chinese companies at all time low valuations right now.

5. Birthrates shall recover at least a little bit with the right policies, i think china can do it. 

6. Crime and underworld when there are 400000 cameras in Shenzhen observing everything. Their homicide rates are one of the lowest in the world. 

[Luke]

Meanwhile Europe and US promising no more ICE Cars and then want to get into trade wars with China when: 

 

[Luke]

35 minutes ago, Spekulatius said:

2014 was the year Xi Jinping took power. It has been downhill since - first slowly and now the negative fallout is having more and more impact.

GDP grew 7% after he took over and then Covid came, their actions did not end up working and they adapted, capable of change and opened up. Now China deals with the huge problems from its extreme lockdowns and of a rising rate environment. If we look back on China in a decade, this will look just like the US in 2008 and returns from then on will be just fine.

[Luke]

Baidu, JD, Baba, Tencent, all very cheap good growing companies. China has 3500 year of history, last century a century of humiliation which Xi Jinping does not want to repeat, its very likely he wont. Things will continue, markets will continue, returns will continue etc. 

 

At some point in the future, maybe a few years out sentinment will shift, maybe Xi Jinping dies and they reelect a new leader, i am a fundamental China bull. 

[Guest]

From a stock market perspective, Fidelity China Region (one of the older China funds) has earned 833.62% since inception in 1995. The old, boring S&P 500 index has earned 1,114.82%

 

 

[rohitc99]

No offense to china bulls, but i reminded of munger's quote - if you mix turds and raisins when i think of investing in china tech companies. great companies, cash flow etc etc ., but politics and the geopolitical drama is a 7 footer

 

there are enough ideas in North america or Europe for sure  

[zippy1]

My understanding is the unemployment rate reported by Chinese Authorities has a different criterion than those reported by say US or France. France requires a person works 20 hours a week to be counted as employed. I think US uses 15 hours a week as the criterion. China uses one hour per week, yes, 1 hour per week.
For this reason, I am told that it is best to compare Chinese reported numbers across time instead of using them to compare against numbers reported by other countries. 
In addition, this unemployment rate is for Cities and towns only. The rural part of China is not included. There are 700 millions people, roughly half of the population, living in the rural part of China. 
the link to how Chinese calculates this is here:

http://big5.www.gov.cn/gate/big5/www.gov.cn/zhengce/2018-04/18/content_5283601.htm

cheers!

Edited June 17, 2023 by zippy1

[Haryana]

5 hours ago, stahleyp said:

From a stock market perspective, Fidelity China Region (one of the older China funds) has earned 833.62% since inception in 1995. The old, boring S&P 500 index has earned 1,114.82%

 

 

 

Considering that US markets are currently nearing the highs and the Chinese markets are currently nearing the lows, those long term % results can easily flip to other side when compared during near highs of Chinese market and lows of US market.

[Haryana]

4 hours ago, rohitc99 said:

No offense to china bulls, but i reminded of munger's quote - if you mix turds and raisins when i think of investing in china tech companies. great companies, cash flow etc etc ., but politics and the geopolitical drama is a 7 footer

 

there are enough ideas in North america or Europe for sure  

 

That sounds unfair, a simlar argument could easily be made about India as well using just a few India specific stereotypes.