China

[Gamecock-YT]

Happy Lunar New Year

[Spekulatius]

21 hours ago, Gamecock-YT said:

Happy Lunar New Year

Flexing quite a bit here:

 

[james22]

 

[crs223]

Who was reporting $6M?  Liars!

[Spekulatius]

While the tariffs slapped on Mexico and Canada makes the most headlines, China also gets an extra 10% but equally impotent the de minimus provision seems to be gone come Tuesday. That means that Shein and Temu are probably finished in the US:

https://www.cnn.com/2025/02/01/politics/mexico-canada-china-tariffs-trump/index.html

 

Quote

The tariffs will have no exemptions, and the executive action Trump signed Saturday will close the so-called de minimis loophole that had allowed shipments of $800 or less to come into the United States tax-free — a key provision used by many American small businesses but also Chinese e-commerce companies such as Shein and Temu. Trump administration officials said the loophole prevented customs officials from properly inspecting those packages.

 

Edited February 2 by Spekulatius

[sleepydragon]

https://about.usps.com/newsroom/service-alerts/international/suspension-of-inbound-parcels-from-china-and-hong-kong.htm
 

 

[Parsad]

https://www.cnn.com/2025/02/05/climate/china-nuclear-fusion/index.html

 

Nobody builds shit faster!   

 

Cheers!

[rogermunibond]

More accessible link

 

https://www.reuters.com/world/china/images-show-china-building-huge-fusion-research-facility-analysts-say-2025-01-28/

[nsx5200]

China to boost residents' income to spur spending | Reuters

Looks like they're finally trying to juice Chinese consumer into more spending.

[rogermunibond]

FT column on China and it's trade advantages.  The size of China monthly exports to emerging countries is rather astounding.

 

https://on.ft.com/3CJtRt4

Edited February 11 by rogermunibond

[formthirteen]

13 minutes ago, rogermunibond said:

FT column on China and it's trade advantages.  The size of China monthly exports to emerging countries is rather astounding.

 

Thanks. If the countries across the world are smart they will copy the Chinese:

 

Quote

Chinese companies are already hedging this risk by setting up factories across the world.

 

 

[Luke]

Why am I getting itchy feet that a major bullrun is developing in chinese stocks?....havent read any negative news for a while, focus is on current US administration and tariffs+ukraine. China aint looking bad here...

[Paarslaars]

22 minutes ago, Luke said:

Why am I getting itchy feet that a major bullrun is developing in chinese stocks?...

Because you sold... I have the other problem, typically bear runs start when I buy.  

[Luke]

1 hour ago, Paarslaars said:

Because you sold... I have the other problem, typically bear runs start when I buy.  

[TwoCitiesCapital]

Because with all of the negative sentiment surrounding China, as well as the ongoing real estate crisis, the valuations were abysmal. I suspect buying Chinese growth in 2024 may end looking similar to purchasing U.S. growth in 2008. 

 

Maybe not quite as good given the political tensions and starting maturity of the companies, but it is darkest before dawn and you want to be buying when its absolutely the "worst" time to be doing so. 

Edited Friday at 05:30 PM by TwoCitiesCapital

[thowed]

@TwoCitiesCapital This is sounding more and more right to me - having capitulated & sold last year!  Was about 2-3 years of detioriation, and I couldn't see it any more.

 

I recently bought a bit of Tencent before it ran away today - always thought it was highest quality large-cap with great management, so hope it's a set and forget for a decade or two.

[TwoCitiesCapital]

I think I'm fortunate in these cases because this is what I look for. Stocks down 50% from their highs, or more. Bad sentiment, negative headlines, etc. And a willingness to buy what is cheap without regards to a quality screen. 

 

I never owned the BATS when they were popular. But I started buying Alibaba last summer and have been adding to Prosus in recent months. Relative valuations were stupid and the sentiment surrounding the real estate made it clear there was an opportunity in China generally. Collectively, they're now my 3rd largest position behind Fairfax and Exor. Was happy to see Tepper buying in size recently which gave me added confidence given his track record calling these things. 

[mt04]

China to lift restrictions on foreign capital - Chinadaily.com.cn

Major plan aims to ensure stable A-share market

 

have been increasing my investment in China significantly recently - Taiwan risk should be very low over the short to mid-term as the country is in the process of opening up (to foreign capital)

 

would not be sensible to propagate an approach of opening up just before willfully ending it through the destruction of trust

 

we seem to be facing major pumping

[Spekulatius]

58 minutes ago, mt04 said:

China to lift restrictions on foreign capital - Chinadaily.com.cn

Major plan aims to ensure stable A-share market

 

have been increasing my investment in China significantly recently - Taiwan risk should be very low over the short to mid-term as the country is in the process of opening up (to foreign capital)

 

would not be sensible to propagate an approach of opening up just before willfully ending it through the destruction of trust

 

we seem to be facing major pumping

Why not lay a trap and get foreign capital suckered in before letting it snap shut. It makes perfect sense to me.

[crs223]

They'll let the foreign capital in... but will they let it out when it comes time to pay dividends or sell your shares?  My understanding is that CCP permission is needed to exchange Yuan for USD.  Also: will they allow BABA to pay dividends and/or make buybacks on the NYSE in USD?  Or will BABA have to continue issuing convertible bonds (denominated in USD) to fund the share buybacks (a paradox... presumably because CCP blocking exchange of Yuan for USD).

[winjitsu]

2 hours ago, crs223 said:

They'll let the foreign capital in... but will they let it out when it comes time to pay dividends or sell your shares?  My understanding is that CCP permission is needed to exchange Yuan for USD.  Also: will they allow BABA to pay dividends and/or make buybacks on the NYSE in USD?  Or will BABA have to continue issuing convertible bonds (denominated in USD) to fund the share buybacks (a paradox... presumably because CCP blocking exchange of Yuan for USD).

 

Enter the role of HKD and Hong Kong, basically the mechanism to acquire offshore dollars.

 

[Hektor]

9 hours ago, crs223 said:

hey'll let the foreign capital in... but will they let it out when it comes time to pay dividends or sell your shares?  My understanding is that CCP permission is needed to exchange Yuan for USD.  Also: will they allow BABA to pay dividends and/or make buybacks on the NYSE in USD?  Or will BABA have to continue issuing convertible bonds (denominated in USD) to fund the share buybacks (a paradox... presumably because CCP blocking exchange of Yuan for USD).

After the not so distant episode of muscling business leaders, will capital flow in?

[Hektor]

https://fortune.com/2025/02/18/why-xi-jinping-met-with-top-leaders-from-alibaba-huawei-tencent-meituan-xiaomi-and-more/

 

Why Xi Jinping met with top leaders from Alibaba, Huawei, Tencent, Meituan, Xiaomi, and more

 

"Chinese President Xi Jinping met with several prominent Chinese tech entrepreneurs on Monday in a major show of support.

 

State media reported that Xi hosted Alibaba cofounder Jack Ma, Meituan CEO Wang Xing, Xiaomi CEO Lei Jun alongside Unitree founder and CEO Wang Xingxing, DeepSeek founder Liang Wenfeng, Huawei founder Ren Zhengfei, Tencent founder Pony Ma, BYD CEO Wang Chuanfu, and CATL CEO Robin Zeng.

 

Together, the executives represent chipmakers, electric carmakers, and AI developers that Xi hopes will help China reduce its reliance on U.S. alternatives.

 

In a speech, Xi urged the executives “to maintain their competitive spirit and have confidence in the country’s future,” as a Bloomberg report put it. China is the world’s second-largest economy but its momentum has slowed and its trade war with the U.S. has rattled supply chains.

 

Xi also promised to eliminate unreasonable fees or fines impeding entrepreneurs in the state-dominated economy. “It is necessary to resolutely remove all kinds of obstacles to the equal use of production factors and fair participation in market competition,” Xi told the entrepreneurs, according to a Xinhua report. 

 

How far will Beijing actually go to support the private sector? It remains to be seen. But entrepreneurs like Jack Ma surely remember that it wasn’t so long ago that the Chinese government was willing to scuttle the country’s largest IPO in the name of alignment."

 

[crs223]

7 hours ago, winjitsu said:

 

Enter the role of HKD and Hong Kong, basically the mechanism to acquire offshore dollars.

 

 

According to ChatGPT, this would not be a viable option to return capital to shareholders:

 

Alibaba wants to return more USD to shareholders via buybacks and dividends on the NYSE but it was run out of USD.  Can Alibaba bypass CCP capital controls and simply exchange their CNY to CNH and then to USD?

 

Alibaba, like other Chinese companies, faces strict capital controls imposed by the Chinese government, which regulate the conversion and outflow of renminbi (RMB) into foreign currencies like USD. Here's why the approach you suggested—converting CNY to CNH and then to USD—would not be a simple workaround:

1. CNY vs. CNH: CNY (onshore renminbi) is subject to strict regulatory oversight by the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE), while CNH (offshore renminbi) is traded more freely in markets like Hong Kong. However, converting large amounts of CNY to CNH is still monitored and restricted.

2. Capital Controls on CNY-CNH Conversions: Even though CNH is more freely traded, the ability of a Chinese company like Alibaba to convert onshore CNY to CNH is not unlimited. The Chinese government carefully monitors and restricts large conversions to prevent capital flight.

3. USD Liquidity Constraints in Offshore Markets: While CNH can be converted to USD in offshore markets, it would still require sufficient USD liquidity. If Alibaba attempted to do this at scale, authorities would likely intervene.

4. Regulatory Oversight: Given Alibaba’s prominence, any large-scale attempt to bypass capital controls would likely attract regulatory scrutiny, leading to potential penalties or restrictions on future transactions.

[Spekulatius]

You cannot move capital out of China without regulatory approval. This is true for domestic as well as subsidies of foreign companies.

 

The Yuan is not freely convertible into other currencies either.