China

[backtothebeach]

3 minutes ago, Luca said:

Its definitely refreshing. We will see :))

Uncle dictator ate some chalk for a day.

[UK]

They just days ago again cracked down on online education and brokerages, providing foreign trading. And is Didi app already available? Would be far better indicator for me, than his greetings...

[maplevalue]

Jack Ma’s Ant Wins Approval for $1.5 Billion Capital Plan 

 

https://www.bloomberg.com/news/articles/2023-01-04/jack-ma-s-ant-group-wins-approval-for-1-5-billion-capital-plan

[UK]

22 hours ago, maplevalue said:

Jack Ma’s Ant Wins Approval for $1.5 Billion Capital Plan 

 

https://www.bloomberg.com/news/articles/2023-01-04/jack-ma-s-ant-group-wins-approval-for-1-5-billion-capital-plan

 

This is much better than just words, of which we have plenty:)

 

Also: https://www.bloomberg.com/news/articles/2023-01-04/alibaba-tencent-brace-for-slowdown-after-beijing-truce?srnd=premium-europe

And: https://www.bloomberg.com/news/articles/2023-01-05/hk-brokers-reopening-euphoria-is-dealt-blow-by-china-clampdown?srnd=premium-europe

 

But perhaps fundamentals/growth will be a driver soon.

 

Edited January 5, 2023 by UK

[james22]

 

[mcliu]

52 minutes ago, james22 said:

 

 

Hasn't this guy been saying China has 10 years left for the last 15 years?

 

https://www.businessinsider.com/stratfor-predictions-for-the-next-decade-2010-1

 

Lawrence Delevingne  

Jan 22, 2010, 9:07 AM

 

We spoke with Peter Zeihan, Vice President of Strategic Intelligence, about STRATFOR's predictions, of which he was an author. Below are edited excerpts from our conversation.

 

Which predictions are most surprising?

Aside from the United States not going anywhere, I would say we expect the economic collapse of China in this coming decade. We've been talking for awhile about how the economic system there is remarkably unstable and we think that they're going to reach a break point as all of the internal inconsistencies come to light and shatter. By the end of the decade, it'll be pretty obvious to everybody that the China miracle is over. As we enter the decade, people are finally, finally starting to talk about China bubbles. If only their problem was that simple! 

[Jaygo]

He has been saying that for a decade or more but in a many ways he is correct. 
 

China has had some pretty epic problems arise and worsen.  
 

housing affordability, property developer failures and a perverse investment culture.
 

they are pariahs now siding with Russia geopolitically, xi basically getting rid of anyone who disagrees with him shows fear based decisions.

Worsening demographics and foreign investment leaving. not to mention their treatment of minorities shows a moral collapse that I think has an impact on their society. 
 

looks to me like the thesis is coming to fruition just in a much more mannered way.  
Big headlines sell books and consulting gigs so Peter takes the shock and awe route with his pronouncements. 
 

 

 

 

 

[zippy1]

The stock market appears to be doing quite poorly over the past 5 years?

[Luca]

https://www.ft.com/content/e592033b-9e34-4e3d-ae53-17fa34c16009?accessToken=zwAAAYWawEU_kdPlkgM7njROPdOuUxf6NMFgCQ.MEUCIHTIV18k06rE_s3cAG96HCMEOsQjr4R4T9w1T1POW1QyAiEA4792OHBP2_K9RcPMU61xjWM183n_SQ-evTc-BE1696o&segmentId=e95a9ae7-622c-6235-5f87-51e412b47e97&shareType=enterprise

 

The costs of China’s chaotic exit from its zero-Covid strategy are surging. In spite of a virtually static official death toll, a slew of obituaries for elderly public figures from academics to opera singers demonstrate the impact of the virus among its vulnerable population. Hospitals in several parts of the country are overwhelmed, and a scramble for antiviral drugs and painkillers is creating shortages across Asia. Unofficial projections are putting the number of people that could die in China’s exit wave at about 1mn. Such prospects not only damage the image of Xi Jinping, China’s most powerful leader since Mao Zedong. They also leave Beijing’s propaganda organs struggling to defend policies after two years spent playing up hefty death tolls in the west as evidence of China’s superior governance. But behind the havoc, a fundamental reset is taking place in Xi’s foreign and economic policies. According to Chinese officials and government advisers, Beijing is putting together policies aimed at improving diplomatic ties that have soured badly and boosting a deeply strained economy. The motivation behind the intended resets — the success of which remains uncertain — derives from a confluence of different economic, social and foreign policy stresses that have reached critical levels, the officials and advisers add.

 

Several of the new policies and plans represent a fleshing out of the “spirit” of the 20th congress of the Chinese Communist party in October, the most important set-piece event in the Chinese political calendar for five years that established the tone for a series of long-range objectives. After months of fierce internal politics, Xi secured an unprecedented third term as leader of the CCP and was able to pick a ruling politburo composed exclusively of loyalists. With the congress behind him, Xi is now attempting a course-correction. From an economic perspective, the main goals are to restore robust growth to China’s slowing economy, improve the lot of hundreds of millions of Chinese rural workers, stabilise the ailing property market and shore up a crisis afflicting the finances of scores of local governments, the officials and government advisers say. Chen Zhiwu, one of several leading economists who expect Beijing to push through a series of pro-growth policies, said he expects 2023’s target will be “6 per cent or higher” — much higher than the IMF’s projection of 4.4 per cent. “Given that they may aim for an average growth rate of 5 per cent and 2022 is likely to deliver about 3 per cent, they need to have something like 7 per cent for 2023,” says Chen, a professor of finance at Hong Kong University. Several other economists have predicted 2023 GDP growth at above 5 per cent. From a diplomatic perspective, China’s main aim is to improve relations with some countries in the west, after a period which has at times left Beijing feeling uncomfortably isolated. The focus is on ties with Europe, which have been badly damaged by China’s support for its partner Russia throughout Moscow’s war against Ukraine.

“Diplomatically, Beijing hopes it will not become a rival to every country in the west and nor does it wish to look isolated at multilateral fora,” says Yu Jie, a China expert at UK think-tank Chatham House. “Russia’s faltering military adventure in Ukraine has significantly reduced Beijing’s return on investment in its bilateral ties with Moscow.” While Xi and Vladimir Putin, Russia’s president, pledged last month to deepen bilateral ties, several Chinese officials in private conversations with the Financial Times strove to put clear daylight between Beijing and Moscow on the issue of Ukraine — a message that has been repeated to some European diplomats. Some are scathing. “Putin is crazy,” says one Chinese official, who declined to be identified. “The invasion decision was made by a very small group of people. China shouldn’t simply

 

Mistrust with Moscow The starting point for Xi’s diplomatic reset is a re-evaluation in Beijing about the benefits of its close relationship with Moscow. China now perceives a likelihood that Russia will fail to prevail against Ukraine and emerge from the conflict a “minor power”, much diminished economically and diplomatically on the world stage, according to Chinese officials. In addition, for all the public professions of bilateral amity, in private some Chinese officials express at least a measure of mistrust towards Putin himself. Five senior Chinese officials with knowledge of the issue have told the FT at different times over the past nine months that Moscow did not inform Beijing of its intention to launch a full invasion of Ukraine before Putin ordered the attack. Such views are at odds with the impression given by a joint statement issued by China and Russia on February 4 following a meeting between Xi and Putin in Beijing — just 20 days before Russia attacked Ukraine. It proclaimed that there were “no limits to Sino-Russian co-operation . . . no forbidden zones”. follow Russia.”

 

No transcript of their conversation has been made public, so exactly what passed between Xi and Putin is unclear. However, one official told the FT that the closest that Putin got to informing Xi was to say that Russia “would not rule out taking whatever measures possible if eastern Ukrainian separatists attack Russian territory and cause humanitarian disasters”. This line was taken by the Chinese side as signalling the potential for some limited military engagement, not the wholesale invasion that Putin launched, the official said. Evidence to support failures of Chinese understanding, according to Chinese officials, has been the demotion in June of Le Yucheng, who at the time of the invasion was a vice-minister of foreign affairs and the ministry’s top Russia expert. Le had been widely spoken of in Chinese official circles as the likely next foreign minister. He now occupies a post as deputy head of the National Radio and Television Administration. “Le was demoted by two levels of seniority,” said one person familiar with the issue. “He was held responsible for the intelligence failure on Russia’s invasion.” Whatever the exact nature of what Putin told Xi, Chinese diplomats seeking to rehabilitate China’s standing in Europe have in private conversations maintained that Beijing was unaware of Moscow’s intention to launch a full invasion, Chinese officials and European diplomats said. This line is just one strand in a broader strategy aimed at lessening China’s sense of isolation and preventing Europe from becoming even closer to the US. Beijing’s main ploy is to attempt to reassure European counterparts that it is willing to use the closeness of its relationship with Moscow to restrain Putin from resorting to the use of nuclear weapons, Chinese and European officials say.

Another aspect of Beijing’s strategy is to position itself not only as a potential peacemaker but also as a willing party in any postwar efforts to help rebuild Ukraine, Chinese officials say. Xi himself sought to portray himself as on the side of peace in remarks he made to Putin late last month. “The road to peace talks will not be smooth, but as long as the efforts are not given up, the prospect of peace will always exist,” Xi said. “China will continue to uphold an objective and fair stance, work to bring together the international community, and play a constructive role in peacefully resolving the Ukrainian crisis.” In another sign that China is seeking to dial back its antagonism towards the west, it has sidelined Zhao Lijian, one of its most prominent “wolf warrior” diplomats. A former official spokesperson for the foreign ministry, Zhao is now listed as one of three deputy directors for boundary and ocean affairs, a relatively obscure department. Zhao, who has 1.9m followers on Twitter, frequently used his account to lash out at the west. In 2019, Susan Rice, who served as Barack Obama’s national security adviser, labelled Zhao a “racist disgrace” after he sent a provocative tweet about race relations in Washington DC. As it seeks to repair ties with European powers, Beijing is insisting that its European counterparts agree to repeat a “no decoupling” mantra — marking a clear difference with Washington, which is seeking to limit US commercial ties with China in certain areas, particularly with regard to sensitive technologies. “China has realised that it has antagonised too many countries at the same time, particularly among developed countries which still today are its main trade and economic partners,” says Jean-Pierre Cabestan, a China expert at Hong Kong Baptist University.

 

“So it is trying very hard to reach out to the EU and key European nations — Germany, France, Italy and Spain — as well as America’s Asian allies, such as Japan and South Korea and US partners such as Vietnam.” The EU is China’s biggest trade partner and Beijing runs a huge trade surplus with the bloc. Similarly, several of Europe’s leading companies rank among China’s biggest foreign investors. China’s desire for a diplomatic reset with Europe appears to be yielding significant results. Visits to Beijing in November by Olaf Scholz, the German chancellor, and Charles Michel, president of the European Council, are set to be followed early this year by French president Emmanuel Macron and Italian prime minister Giorgia Meloni. Macron is expected to follow Scholz in voicing opposition to “decoupling” from China, thereby ceding to Beijing some ground in its long-running strategy to sow division between European powers and the US. Although he has also talked about reducing dependency on China, Scholz made clear during this visit that Berlin not only rejects “decoupling” but also sees China as an “important economic and commercial partner”. “Macron, like Scholz, is opposed to decoupling. He is still promoting engagement,” says Cabestan. “China will try to utilise Macron’s strategic autonomy ambitions to drive a wedge between Europe and America.” The hope that China can help restrain Moscow from using nuclear weapons is a potent motivator in European capitals, European officials and analysts say. “China would always have opposed the use of nuclear weapons,” says Susan Shirk, chair of the 21st Century China Center at the University of California in San Diego. “But when Xi Jinping says these kinds of things to European leaders, he wants to emphasise a certain distance from Russia.” There are indications that the approach is working in Beijing’s favour. “China-Europe relations have picked up significantly because Europe is not advocating decoupling from China and demanding strategic independence,” says Ding Chun, a director at the Centre for European Studies at Fudan University in Shanghai. “Europe also faces a series of problems such as the energy crisis and the pressure on economic recovery,” Ding adds. “Relations are surely recovering but how far they can go, we should not have overly high expectations.”

 

Regardless of Beijing’s protestations that it had no forewarning from Moscow, there is still considerable scepticism about China’s efforts to mend ties with Europe. EU officials and member state governments have consistently griped at China’s support for Putin’s war and Xi’s failure to pressure him to end it. In addition, the war’s stark exposure of the EU’s reliance on Russia for energy has accelerated a push to reduce a similar reliance on China for certain critical raw minerals and technological goods. The EU’s foreign service in October used a private paper to urge EU capitals to toughen their attitude towards China, in what one senior Brussels official told the FT amounted to “moving to a logic of all-out competition [with Beijing], economically but also politically”. A spending spree? While China’s intended diplomatic reset is starting to make waves around the world, its strategy to shore up economic growth at home is regarded as of greater importance in Beijing. The untested assumption behind the pro-growth strategy taking shape is that China will emerge from its Covid-induced economic malaise over the next few months. Han Wenxiu, a leading official in the influential Central Financial and Economic Affairs Commission, said in December that the first quarter of next year was likely to suffer from significant disruptions but the second quarter was expected to see an economic improvement at an “accelerated pace”. “We have the confidence, conditions and capacity to turn China’s economy for the better as a whole,” Han said. His words are thought to carry extra weight because the commission in which he works is chaired by Xi. Han singled out real estate and consumer spending as two areas for attention. In the case of the property market — which has been a prime driver of GDP growth over the past two decades — Han announced that “preventing and resolving the risks . . . are a top priority”. Analysts interpret his words as meaning that Beijing plans to stabilise the market — which in November suffered a sales decline of 28.4 per cent year on year — sometime this year. In addition to Han’s verbal support, China has unveiled 16 support measures for the property market, while state-run banks have pledged an estimated $256bn in potential credit to specific developers.

 

Boosting consumer spending was also a focus that featured at the Central Economic Work Conference, which took place in mid-December. This annual conference is seen as particularly significant because it came on the heels of the 20th party congress and can therefore be seen as a statement of intent for Xi’s new administration. In the longer term, Beijing intends to realise its goal of “common prosperity” by substantially increasing the number of people in a “middle income” cohort, government advisers say. But in the short term, several analysts are expecting a “relief wave” of spending after Covid disruptions are over. Andy Rothman, an investment strategist at the Matthews Asia fund, says that a huge pool of household savings could fuel a spree of spending once the exit from Covid lockdowns is achieved. He notes that family bank balances are up 42 per cent, or $4.8tn, since the start of 2020 — an amount that is larger than the UK’s GDP. Rothman sees a return to “pragmatism” in Beijing’s economic policymaking after a statist lurch in recent years, citing Xi’s pledges at the party congress to “bring per capita income to new heights” and “provide an enabling environment for private enterprise”. Portfolio investors appear ready to embrace the idea that China’s economy is on the verge of a return to health. Hong Kong’s Hang Seng index, a gauge of sentiment towards China’s fortunes, has bounced back strongly from a recent nadir hit in October last year. But some analysts remain more hesitant, pointing to China’s chaotic emergence from its lockdowns. “With Covid-zero now in the rear-view mirror, markets expect a gangbuster 2023 recovery. That will be right, eventually,” says Derek Scissors, chief economist at Beige Book, a research company. “However, with the ongoing Covid tidal wave, investment sliding to a 10-quarter low, and new orders continuing to get battered, a meaningful Q1 recovery is increasingly unrealistic.”

[Luca]

Very Bullish for China!

[crs223]

On 1/11/2023 at 4:32 AM, Luca said:

a slew of obituaries

 

Whenever a high level policy is changed for the better, losers will come out of the woodwork to say “you’re not doing it optimally” or “too fast” or “too slow”.  Another example is the Afghanistan withdrawal.

 

Good job China for opening up.

[UK]

https://www.bloomberg.com/news/articles/2023-01-16/didi-wins-approval-to-restore-ride-hailing-apps-to-stores-as-crackdown-eases?srnd=premium-europe&leadSource=uverify wall

[UK]

https://www.bloomberg.com/news/articles/2023-01-17/china-s-population-starts-shrinking-first-drop-since-1960s?srnd=premium-europe

 

The population drop-off came much faster than previously expected, and could act as a brake on economic growth by slowing demand for goods such as new houses. Due to the decline, the Chinese economy may struggle to overtake the US in size and the nation could lose its status as the world’s most populous country to India this year. As recently as 2019, the United Nations was forecasting that China’s population would peak in 2031 and then decline, but last year the UN had revised that estimate to see a peak at the start of 2022. The labor force is already shrinking, long-term demand for houses will fall likely further, and the government may also struggle to pay for its underfunded national pension system.

 

 

[Luca]

4 hours ago, UK said:

https://www.bloomberg.com/news/articles/2023-01-17/china-s-population-starts-shrinking-first-drop-since-1960s?srnd=premium-europe

 

The population drop-off came much faster than previously expected, and could act as a brake on economic growth by slowing demand for goods such as new houses. Due to the decline, the Chinese economy may struggle to overtake the US in size and the nation could lose its status as the world’s most populous country to India this year. As recently as 2019, the United Nations was forecasting that China’s population would peak in 2031 and then decline, but last year the UN had revised that estimate to see a peak at the start of 2022. The labor force is already shrinking, long-term demand for houses will fall likely further, and the government may also struggle to pay for its underfunded national pension system.

 

 

I bet there could be some equally extreme measures like the one child policy to increase the birth rate. 

 

Good Article: 

 

[Luca]

In late October, when Xi Jinping consolidated his hold on China’s communist party at its five-yearly congress, the world cringed. Xi seemed determined to push China back to the age of Mao Zedong, his role model. Hardline ideology would tighten its grip on the world’s second-largest economy, with dire implications for the rest. The last thing anyone expected from a strongman president entering his 11th year in power was a sudden about face. Yet within weeks, Xi’s government has reversed its efforts to control Covid-19, Big Tech companies, the property market and more. It has shown signs of reduced support for Russia’s war in Ukraine while easing tensions with the US and in its territorial disputes in the South China Sea. This softening seemed so uncharacteristic of Xi, some even speculated that he no longer set government policy. That’s unlikely — at the congress Xi had purged enemies and installed allies throughout the party. Yet the 180-degree turn on multiple policy fronts was unmistakable and raises doubts about everything the world thought it knew about Xi, the unbending hardliner. Was he now bending to pressure from worried officials, the public, the deteriorating economy? The answer may be all of the above. Xi’s Covid policy, the tech crackdown and the property bust had brought the economy to a standstill in 2022. The economy appears to have contracted in the fourth quarter, which is likely to bring growth for the year down to 3 per cent. That is according to official Chinese data — the reality was probably worse. China has not grown this slowly since the late 1970s and is growing no faster than the rest of the world, also a first since the 1970s. A performance that weak was a serious threat to an authoritarian state that rests its legitimacy on promises to restore China’s prosperity and its global stature. As the slowdown fuelled street rallies against the pursuit of “zero-Covid”, some protesters dared to call for Xi to step down. Officials in his own government were reportedly urging him to save the economy. Still, few if any China watchers thought the paramount leader would change course. Those who last more than 10 years in power often grow less flexible, and have worse effects on the economy over time, even in democracies. Many dictators, from Cuba’s Fidel Castro to Mao, have been snowballing disasters. The rare, steady reformers include the likes of Singapore’s Lee Kuan Yew, and Deng Xiaoping, who dumped Maoism for pragmatism and set China on the road to prosperity after 1980. Xi now appears to have moved into a grey area on the spectrum of ageing leaders — willing to reform, at least in the depths of a crisis. Aiming to revive the economy after the congress, Xi’s government started sounding less Maoist. It has dropped the “three red lines” on borrowing by developers, and announced that the “rectification” campaign against fintech firms is nearly complete. After tightening state control for years, it is sending out messages of support to the private sector, even offering details of its new global data market that suggest respect for private data ownership. The irony: Xi may be trying impractically hard to revive growth. His plans to build “a modern socialist economy” imply an annual gross domestic product growth target of 5 per cent, which is no longer possible. China’s population growth has slowed sharply, as has productivity growth. With fewer workers and slumping output per worker, the country’s potential growth rate is 2.5 per cent. Beyond this year, when spending by Chinese consumers released from lockdown may temporarily boost growth, 5 per cent is an unrealistic target. And more debt-financed spending will only increase China’s already massive debt load. Global investors, who so often blow hot and cold on China, have again flipped — this time to embrace the new Xi. Before November, the country’s stock market was tanking with the economy. Fund managers were launching emerging market mandates excluding China. Now, they are bullish on hopes of a post-pandemic “reopening” bounce and have been pouring money into Chinese stocks. The benchmark MSCI China index is up a staggering 50 per cent since the late October lows. Yet the questions about China’s policy direction remain. Xi’s pivot is a pragmatic course correction, but it raises doubts about his steadiness. His impulse to control may reassert itself when the economy starts to recover — a reflex much more common in ageing leaders than a full rebirth as a steady reformer. Still, we should celebrate this new Xi, if he lasts — he’s a lot better for the world than the old one.

[Libs]

8 hours ago, Luca said:

In late October, when Xi Jinping consolidated his hold on China’s communist party at its five-yearly congress, the world cringed. Xi seemed determined to push China back to the age of Mao Zedong, his role model. Hardline ideology would tighten its grip on the world’s second-largest economy, with dire implications for the rest. The last thing anyone expected from a strongman president entering his 11th year in power was a sudden about face. Yet within weeks, Xi’s government has reversed its efforts to control Covid-19, Big Tech companies, the property market and more. It has shown signs of reduced support for Russia’s war in Ukraine while easing tensions with the US and in its territorial disputes in the South China Sea. This softening seemed so uncharacteristic of Xi, some even speculated that he no longer set government policy. That’s unlikely — at the congress Xi had purged enemies and installed allies throughout the party. Yet the 180-degree turn on multiple policy fronts was unmistakable and raises doubts about everything the world thought it knew about Xi, the unbending hardliner. Was he now bending to pressure from worried officials, the public, the deteriorating economy? The answer may be all of the above. Xi’s Covid policy, the tech crackdown and the property bust had brought the economy to a standstill in 2022. The economy appears to have contracted in the fourth quarter, which is likely to bring growth for the year down to 3 per cent. That is according to official Chinese data — the reality was probably worse. China has not grown this slowly since the late 1970s and is growing no faster than the rest of the world, also a first since the 1970s. A performance that weak was a serious threat to an authoritarian state that rests its legitimacy on promises to restore China’s prosperity and its global stature. As the slowdown fuelled street rallies against the pursuit of “zero-Covid”, some protesters dared to call for Xi to step down. Officials in his own government were reportedly urging him to save the economy. Still, few if any China watchers thought the paramount leader would change course. Those who last more than 10 years in power often grow less flexible, and have worse effects on the economy over time, even in democracies. Many dictators, from Cuba’s Fidel Castro to Mao, have been snowballing disasters. The rare, steady reformers include the likes of Singapore’s Lee Kuan Yew, and Deng Xiaoping, who dumped Maoism for pragmatism and set China on the road to prosperity after 1980. Xi now appears to have moved into a grey area on the spectrum of ageing leaders — willing to reform, at least in the depths of a crisis. Aiming to revive the economy after the congress, Xi’s government started sounding less Maoist. It has dropped the “three red lines” on borrowing by developers, and announced that the “rectification” campaign against fintech firms is nearly complete. After tightening state control for years, it is sending out messages of support to the private sector, even offering details of its new global data market that suggest respect for private data ownership. The irony: Xi may be trying impractically hard to revive growth. His plans to build “a modern socialist economy” imply an annual gross domestic product growth target of 5 per cent, which is no longer possible. China’s population growth has slowed sharply, as has productivity growth. With fewer workers and slumping output per worker, the country’s potential growth rate is 2.5 per cent. Beyond this year, when spending by Chinese consumers released from lockdown may temporarily boost growth, 5 per cent is an unrealistic target. And more debt-financed spending will only increase China’s already massive debt load. Global investors, who so often blow hot and cold on China, have again flipped — this time to embrace the new Xi. Before November, the country’s stock market was tanking with the economy. Fund managers were launching emerging market mandates excluding China. Now, they are bullish on hopes of a post-pandemic “reopening” bounce and have been pouring money into Chinese stocks. The benchmark MSCI China index is up a staggering 50 per cent since the late October lows. Yet the questions about China’s policy direction remain. Xi’s pivot is a pragmatic course correction, but it raises doubts about his steadiness. His impulse to control may reassert itself when the economy starts to recover — a reflex much more common in ageing leaders than a full rebirth as a steady reformer. Still, we should celebrate this new Xi, if he lasts — he’s a lot better for the world than the old one.

This is a superb summary. Thanks. More evidence of  the need to be humble about predictions....at least in my case. I'm stunned at XI's reversals. 

[UK]

https://www.bloomberg.com/news/articles/2023-01-19/china-creates-strong-nation-ride-app-as-data-regime-tightens?srnd=premium

[Ulti]

https://podcasts.apple.com/us/podcast/top-traders-unplugged/id888420325?i=1000593746606
 

great podcast with professor Susan Shirk… China expert for decades and her past/ current views on all things China

[Parsad]

https://www.cnn.com/2023/01/20/business/china-evergrande-hui-ka-yan-hnk-intl/index.html

 

At some point, the bank of China is not going to be able to continue acting as the shock absorber for these bad debts. 

 

Meaning...eventually they are going to have to go through their own Lehman/AIG moment! 

 

Cheers!

[Spekulatius]

China (most just China) got to keep the lights on at night:

https://www.wsj.com/articles/shining-a-light-literally-on-how-much-dictators-manipulate-their-economic-stats-11674183190?mod=economy_lead_pos5

 

A recent paper, published in October, by the University of Chicago’s Luis Martinez shines a light on the extent to which autocratic governments might be juicing their estimates of gross domestic product, the commonly used measure of an economy’s size and might.

[Dinar]

It is not just China.  Do you trust US governmental statistics?  I for sure cannot reconcile CPI over the past three decades that I have lived here with how costs have changed.  Not for housing, healthcare, food, education, haircuts, newspapers, restaurants, take-out, and the list goes on.  

[crs223]

On 1/20/2023 at 5:51 PM, Dinar said:

It is not just China.  Do you trust US governmental statistics?

 

I think it would be easy to identify fraud in US stats relative to China given all the data available for research.  My uninformed understanding is that people get black-bagged in China for speaking out against the party narrative.

 

Example: administration might say “no recession” but individuals can crunch the numbers themselves and come to a different conclusion.

[Dinar]

37 minutes ago, crs223 said:

 

I think it would be easy to identify fraud in US stats relative to China given all the data available for research.  My uninformed understanding is that people get black-bagged in China for speaking out against the party narrative.

 

Example: administration might say “no recession” but individuals can crunch the numbers themselves and come to a different conclusion.

Have you looked at the US CPI statistics?  Take a look at food, healthcare, housing, education, services, et all over the past 50 years and see if you can reconcile with official inflation measures.  I have lived in the US for 33 years, official inflation was 120% (CPI went from 134.2 on 12/31/90 to 298.349 on 12/30/2022).   I say not true.  

In terms of food, prices have more than tripled, and closer to 4x for fish.  In terms of healthcare, going back to February of 2009, health insurance prices are up 5x for the same policy.  And I would wager there was no deflation in healthcare between 1990 and 2009.  Education - Yale tuition+room&board = $27K in 1995, and $80K+ this year.  Services: haircut in Manhattan went from 12 in 2001 to $35 in 2023 for a male.  Restaurants - Per Se in 2004 pre-fix = $125, today =  $350 plus...  (CPI = 185.5 on 12/31/2003 and 298.35 on 12/31/2022.) 

Housing: harder to compare, but NYC rents increased three-four fold since 1990 based on anecdotal evidence/personal experience.  

 

This is why I do not trust US government statistics.  Do not start me on quality adjustments and other tricks. Somehow if I ate lobster and it doubled in price, I automatically switch to chicken, so there is no inflation.   My first laptop lasted 8 years - IBM thinkpad, top of the line Dell's break within two years (happened to five Dells that I owned, before I stopped buying from Dell.)  We inherited a baby carriage from sister-in-law, the carriage lasted 4 kids and 15 years, my wife decided to buy new, top-of-the line from the same brand since she was ashamed of the looks she was getting at our private day-care in Manhattan.  New top-of-the line Uppa Baby broke within twelve months.  Same story with jackets - zippers no longer last more than 24 months, Mephisto shoes used to last a decade, now break within 24 months and the list goes on.  

 

[vinod1]

There is no government manipulation of inflation data. It is just a difficult thing to measure and the bureaucrats actually do a pretty good job. One of the few. 

 

Inflation is highly personal and each of us experience differently. As they say our personal experience trumps any data. I bought a Camry LE in 1997 for $19,500. Another Camry LE in 2011 for $20,000. PC's, phones, cameras, etc. All cheaper and better. There are a lot of clothes, shoes and other stuff that were outsourced and quality went down but they got cheaper. They became more of a use a few times and throw. 

 

There is a billion prices project that produces inflation figures similar to official data.

 

http://www.thebillionpricesproject.com/

 

Vinod

[crs223]

I’m not smart enough to compute inflation.

 

I still don’t believe US bureaucrats are manipulating the stats at a level similar to CCP.

 

If the USG is fooling the market, you can profit by selling inflation protected securities.