China

[Parsad]

https://finance.yahoo.com/news/china-developers-slump-most-since-025713139.html

 

Cheers!

[hillfronter83]

Ludashi is a Chinese software company trading in Hong Kong (ticker 3601). It's a net net with about 300 million RMB market cap and over 500 million cash and no debt on its BS. On 9/11/2023, it announced a board meeting and a special dividend. In the following week, Stock surged >70% from HKD1.1/share to HKD1.9/share. On 9/20/2023, stock price suddenly plunged more than 40% to HKD1.2/share with heavy volume. On 9/21/2023, the company announced that its major shareholder with over 30% shares had just dumped 12.77% of shares to the market. And then on 9/22/2023, the company announced that the board meeting is canceled and there will be no special dividend due to "unusual fluctuation in the price and trading volume of the shares of the Company".

 

Well played, insider!

[Spekulatius]

32 minutes ago, hillfronter83 said:

Ludashi is a Chinese software company trading in Hong Kong (ticker 3601). It's a net net with about 300 million RMB market cap and over 500 million cash and no debt on its BS. On 9/11/2023, it announced a board meeting and a special dividend. In the following week, Stock surged >70% from HKD1.1/share to HKD1.9/share. On 9/20/2023, stock price suddenly plunged more than 40% to HKD1.2/share with heavy volume. On 9/21/2023, the company announced that its major shareholder with over 30% shares had just dumped 12.77% of shares to the market. And then on 9/22/2023, the company announced that the board meeting is canceled and there will be no special dividend due to "unusual fluctuation in the price and trading volume of the shares of the Company".

 

Well played, insider!

I guess the "stolen wallets" don't just apply to the small fries, this also scales. In my opinion PDD is most likely to be fraudulent of the big tech co's in China with no CFO and an obvious '"fall guy" signing up the financials, as well as other red flags.

[Luca]

1 hour ago, Spekulatius said:

I guess the "stolen wallets" don't just apply to the small fries, this also scales. In my opinion PDD is most likely to be fraudulent of the big tech co's in China with no CFO and an obvious '"fall guy" signing up the financials, as well as other red flags.

Yeah...PDD is sketchy for sure. Would never make it a large position, numbers look great, if they are real.

[hillfronter83]

3 hours ago, Spekulatius said:

I guess the "stolen wallets" don't just apply to the small fries, this also scales. In my opinion PDD is most likely to be fraudulent of the big tech co's in China with no CFO and an obvious '"fall guy" signing up the financials, as well as other red flags.

Certainly not a small fry. This is the founder of QIHU, which he took private from US exchange for $9 billion in 2016 and relisted in China for about 300 billion RMB, which is worth about 70 billion RMB.

[rogermunibond]

Latest from Martin Wolf on how China can avoid the Japan trap focusing on underconsumption.

 

https://on.ft.com/3LCi1SM

Edited September 26, 2023 by rogermunibond

[Spekulatius]

Underconsumption? They just need to give these Moonlight Clan people some stimi checks - they will spent it. Problem solved:

 

 

[Parsad]

Well, that's the last we've probably heard of him!  Yikes!  Cheers!

 

https://finance.yahoo.com/news/evergrande-suspends-trading-hong-kong-010311150.html

[james22]

Can China contain Evergrande’s collapse?

 

There has long been a sense that China can somehow defy economic gravity, that the normal rules do not apply, and more gullible analysts have praised the quality of the country’s economic technocrats. That has always been something of a myth; more so under Xi Jinping, when control and security trump all else and markets are supposed to do as they are told. The mythical technocrats are now facing their sternest test in navigating what now seems like the inevitable demise of Evergrande.

They will now have to ensure that the fallout does not hammer the rest of China’s economy.

 

https://archive.ph/UW3es

[Xerxes]

Fascinating read

 

[UK]

https://www.bloomberg.com/news/articles/2023-10-23/china-rattles-foreign-firms-again-with-arrests-foxconn-probe?srnd=premium-europe&leadSource=uverify wall

 

Chinese authorities are again shaking the confidence of foreign companies in the country with a series of arrests and an investigation into Foxconn Technology Group, Apple Inc.’s most important partner and one of the largest employers in China. Over the weekend, state media said that regulators are conducting tax audits and reviewing land use by Foxconn, the Taiwanese company that makes the vast majority of iPhones at factories in China. Hon Hai Precision Industry Co., Foxconn’s public arm, said it will collaborate with authorities. Meanwhile, an executive and two former employees of WPP Plc, one of the world’s biggest advertising companies, have been arrested in China, people familiar with the matter said.

[formthirteen]

 

 

[Luca]

Highly interesting!

Edited October 25, 2023 by Luca

[Parsad]

60 Minutes had a terrific story on the threats from China...unprecedented attempts to steal data, intellectual property, technology, etc.  The Five Eyes actually opened up to bring awareness to what is happening.  Cheers!

 

https://www.cbsnews.com/video/60minutes-2023-10-22/

[UK]

https://www.wsj.com/video/series/shelby-holliday/how-chinese-aggression-has-pushed-the-philippines-closer-to-the-us/15A5C436-F3FD-4929-A048-0A9DBE5E32B0

 

https://www.bloomberg.com/news/articles/2023-10-26/biden-warns-china-not-to-attack-philippine-ships-after-incidents?srnd=premium-europe&leadSource=uverify wall

 

“I want to be very clear: The United States’ defense commitment to the Philippines is ironclad,” he said. “Any attack on the Filipino aircraft, vessels, or armed forces will invoke our Mutual Defense Treaty with the Philippines.”

 

Edited October 26, 2023 by UK

[formthirteen]

Quote

 

In the darker scenario, China faces “Japanification”—a shrinking workforce, lost decades of growth. It might avoid that with quick, decisive policy changes, but Cai Xia, who was a professor at the élite Central Party School until she broke ranks and moved abroad, in 2020, told me that mid-level administrators have grown paralyzed by fears of a misstep. “Officials are ‘lying flat,’ ” she said. “If there is no instruction from the top, there will be no action from the bottom.” It is equally unlikely that change will be inspired from abroad. A Chinese diplomat recently told me that the government was annoyed by Westerners preaching reform. “We will stick to our plan,” he said. “The Chinese are stubborn,” he added, smiling tightly. “Principles are more important than tangible benefits.”

The economist Xu Chenggang told me that he regards the Party’s current leaders as political “fundamentalists” who are blind to the risks of doctrinal rigidity. Xu won China’s top economics prize in 2013, and four years later left his post at Tsinghua University, where a climate of ideological stricture has set in. He is now a researcher at Stanford.

During the boom years, China made rapid gains in technology using foreign investment and training, as well as rules that required “technology transfer.” But the U.S. has narrowed those channels: new export controls cut off China’s access to advanced chips, and Biden issued an executive order that bars investors from funding Chinese development of A.I. In response, Xi has repeatedly declared China’s ambition to achieve “self-reliance and strength in science and technology.” Xu is skeptical. “In the U.S., you have a jungle of free competition, dozens of laboratories competing—no one knows what is going to work,” he said. “But the Communist regime will not allow for this. That’s the key issue.” The Chinese government sank billions of dollars into two failed efforts to build foundries for advanced chips; Chinese chatbots have struggled to compete with ChatGPT, because the Party imposed rules requiring them to uphold “socialist core values.” (If you ask ErnieBot, a Chinese version of ChatGPT, whether Xi Jinping is pragmatic, it replies, “Try a different question.”)

 

 

Quote

Xi has always spoken more bluntly in private. In a speech behind closed doors, shortly after he came to power, he uttered what remains the clearest statement of his vision. “Why did the Soviet Communist Party collapse?” he asked, according to excerpts that circulated among Party members. One reason, he said, was that the Soviets’ “ideals and beliefs had wavered.” More important, though, “they didn’t have the tools of dictatorship.” With dogged efficiency, Xi has set out to strengthen belief in the Party and to build the tools of dictatorship. He has succeeded more in the latter than in the former. These days, the most prevalent belief in China is that anyone—from the truest believer to the canniest tycoon—can disappear. This fall, there was fresh evidence: yet another powerful general, the defense minister, Li Shangfu, never arrived at a meeting he was scheduled to attend.

 

https://www.newyorker.com/magazine/2023/10/30/chinas-age-of-malaise

Edited October 30, 2023 by formthirteen

[RichardGibbons]

5 hours ago, formthirteen said:

(If you ask ErnieBot, a Chinese version of ChatGPT, whether Xi Jinping is pragmatic, it replies, “Try a different question.”)

 

This is actually quite a pragmatic response. So at least we know ErnieBot is pragmatic, even if Xi isn't....

[UK]

On 10/30/2023 at 7:16 PM, formthirteen said:

 

 

https://www.newyorker.com/magazine/2023/10/30/chinas-age-of-malaise

 

The Party explained that it was targeting inequality, monopoly, and excessive financial risks, but some of the arrests seemed personal. Ren Zhiqiang, a real-estate tycoon, received an unusually harsh sentence of eighteen years on corruption charges, after someone leaked an essay in which he mocked Xi as a “clown stripped naked who still insisted on being emperor.”

 

None of the targets showed any organized political intentions. The only visible pattern is that Xi and his loyalists appeared intent on snuffing out rival sources of authority. One after another, he got rid of anyone with power, the entrepreneur said: “If you have influence, you have power. If you have capital, you have power.” Xi is said to have spoken bitterly of watching Boris Yeltsin contend with Russian tycoons in the nineteen-nineties. Joerg Wuttke told me, “When Putin entered the Kremlin in 2000, he assembled the oligarchs and said, basically, You can keep your money, but if you go into politics you’re done.” He went on, “In China, the big names should have learned from that meeting, because in this sense Putin and Xi Jinping are soul mates.”

...

Local governments, short of cash, have adopted a subtle extortion method that lawyers call “taxation by investigation.” A factory owner in Shanghai told me that Party officials used bank records to identify residents with liquid assets of at least thirty million yuan—about four million dollars—and then offered them a choice: hand over twenty per cent or “risk a full tax audit.”

 

Recently, the Party has signalled that the purge of the private sector is over, but many have grown wary. A former telecom executive cited an ancient expression—“shi, nong, gong, shang”—which describes a hierarchy of social classes: scholar-officials, farmers, craftsmen, and merchants. “For two thousand years, the merchants were the lowest,” he said. “What Xi is doing is just a reversion to the imperial Chinese mean.” The big winners, in the current era, are officials with deep personal ties to Xi; he has stocked the Politburo with trusted aides, and has cultivated the military by boosting investment and replacing top leaders with loyalists. 

...

In the Xi era, that principle has become, in effect: It doesn’t matter if the cat catches mice, as long as it’s red.

 

 

Edited November 1, 2023 by UK

[UK]

https://www.bloomberg.com/news/articles/2023-11-08/china-s-innovators-are-lying-flat-primavera-s-hu-says?srnd=premium-europe

 

Hu pointed to China’s daunting challenges, particularly from the ongoing property crisis — a saga he said “is still unfolding.” “I don’t see the end anytime soon,” Hu said, adding that China’s real estate woes are “quite different” from what the US experienced in the run-up to the global financial crisis. “I think it’s a multi-year process — it’s more like in Japan, the real estate crisis in Japan in the 1990s. A slow-motion crisis. So China will have to deal with this problem for at least a few more years to come.”

...

“This sense of insecurity, in my observation, in the Chinese entrepreneur community, really I have not seen it like this since 1978,” Hu said, referring to the years just after the death of leader Mao Zedong and before China embarked on a series of broad economic reforms. If China “really commits to rule of law and market reforms, I do think the confidence will slowly but surely come back, then the animal spirit will be rekindled.”

[UK]

https://www.bloomberg.com/news/articles/2023-11-08/china-is-having-a-hard-time-wooing-foreign-investors-back

 

[Spooky]

3 hours ago, UK said:

If China “really commits to rule of law and market reforms, I do think the confidence will slowly but surely come back, then the animal spirit will be rekindled.”

 

I wish this were the case but it seems to me like they have been moving in the opposite direction. We might need to wait until new leadership emerges.

[Parsad]

https://www.cnn.com/2023/11/10/business/china-business-leaders-crackdown-intl-hnk/index.html

 

Cheers!

[Spekulatius]

This seems odd - $137B in sovereign bond sales completely suck out the liquidity and crowd out other issuers that live on day by day financing it seems.

https://finance.yahoo.com/news/chinas-latest-stimulus-effort-unintentionally-023709357.html

[Luca]

[james22]