China

[Libs]

19 hours ago, Luca said:

Yes because China executes a model that has not been executed in the US but that could end up being superior.

There is zero chance this is true. I'm sorry Luca, but you are delusional about this. 

 

 

Edited August 18, 2023 by Libs

[crs223]

18 hours ago, Parsad said:

insurrection and attempt to overturn a democratic election

 

@Parsad why push anti-conservative and anti-christian issues?  Site would be better if you removed political and religious hate.

 

 

Edited August 18, 2023 by crs223

[Castanza]

18 hours ago, Parsad said:

 

America is failing?!  Where exactly is America failing?  

 

Do you live better than your parents did?  Are your children living better than you did?  

 

The largest companies in the world are predominantly U.S.  The USD is still the veto currency for security.  US culture remains dominant globally.  US educational institutions remain at the top of the heap.  US research into healthcare, robotics, AI, pharmaceuticals, infrastructure, etc...all are 1, 2 or 3 globally.

 

Where exactly is America failing?  How is your life worse today than 20-30 years ago?  I keep asking my conservative friends these questions and they have no answers.

 

Uh, we pay more in taxes!  Really, you pay more in taxes than your father did?  Your personal corporation pays more in taxes than corporations 20-30 years ago? 

 

Uh, healthcare is failing us!  Aren't most Americans living longer than previous generations?

 

Uh, radical left-wing politics is running rampant!  Yes, left-wing radicals are more rampant than radicals were in the 1970's?

 

Uh, we're getting further into debt as a country?  Really...Roosevelt and Woodrow Wilson increased the national debt during their tenure by about 750% each...but then they were fighting a war.  Reagan increased it by 160%.  Everyone else, regardless of party, pales in comparison...including Biden.

 

So what exactly is failing?!  Cheers!

 

Cheers!

Hard to discuss this topic of “life is better in America” without discussing “at who’s expense.” 
 

American wealth is a facade of wealth flown in from cheap labor markets and built on the backs of exploited labor. Everything we have in this country that is tangible comes from markets like that. Consumerism as a metric for judging a country’s success or quality of life is meaningless if that country cannot sustain that same level internally. 
 

The consumerism you call “success or quality of life” has given us nothing but the worst mental health conditions in the world. The highest pharmaceutical drug use in the world. Some of the highest suicide rates. Some of the lowest happiness scores. Political division. Worse overall health with no improvements in longevity or quality. Declining birth rates. A crumbling education system withA society addicted to debt. A veteran population thrown under the bus. A hollowed out middle class. The list goes on! 
 

But hey, we’ve built a few social networks and developed better ways to get fast food and cheap Chinese made products delivered to our door in hours so we can keep our eyes fixed to screens!


What are some big American achievements that have nothing to do with unbridled consumerism in the last 30-40 years? A few drug breakthroughs? 

YOUR life might be better, but is the COUNTRY better? Is the US better positioned for long term success? Not sure, it does seem like people and politicians are waking up to this fact. The IS is a big shop and it’s slow to steer, so hopefully over the next 20 years we can get some actual leadership instead of these phonies to usher in a new golden era in American innovation and wealth. I’m confident that we will because when the towing gets tough, Americans tend to rise up like no other nation. But looking around at society and the people described by RKbang in the AV thread,  it might be a while! 

 

There is a reason this song is blowing up with the average person in the US right now. 
 

 

 

[cubsfan]

2 hours ago, Castanza said:

Hard to discuss this topic of “life is better in America” without discussing “at who’s expense.” 
 

American wealth is a facade of wealth flown in from cheap labor markets and built on the backs of exploited labor. Everything we have in this country that is tangible comes from markets like that. Consumerism as a metric for judging a country’s success or quality of life is meaningless if that country cannot sustain that same level internally. 
 

The consumerism you call “success or quality of life” has given us nothing but the worst mental health conditions in the world. The highest pharmaceutical drug use in the world. Some of the highest suicide rates. Some of the lowest happiness scores. Political division. Worse overall health with no improvements in longevity or quality. Declining birth rates. A crumbling education system withA society addicted to debt. A veteran population thrown under the bus. A hollowed out middle class. The list goes on! 
 

But hey, we’ve built a few social networks and developed better ways to get fast food and cheap Chinese made products delivered to our door in hours so we can keep our eyes fixed to screens!


What are some big American achievements that have nothing to do with unbridled consumerism in the last 30-40 years? A few drug breakthroughs? 

YOUR life might be better, but is the COUNTRY better? Is the US better positioned for long term success? Not sure, it does seem like people and politicians are waking up to this fact. The IS is a big shop and it’s slow to steer, so hopefully over the next 20 years we can get some actual leadership instead of these phonies to usher in a new golden era in American innovation and wealth. I’m confident that we will because when the towing gets tough, Americans tend to rise up like no other nation. But looking around at society and the people described by RKbang in the AV thread,  it might be a while! 

 

There is a reason this song is blowing up with the average person in the US right now. 
 

 

 

Bravo - tough to sum it up better than that.

 

But shit, if you need more proof, just look at California, the state that always leads the USA in change.

 

A total disaster. Taxes skyrocket while living standards and society continues to collapse.

Edited August 18, 2023 by cubsfan

[james22]

The shame of it! Mississippi has found itself in the humiliating position of being compared disobligingly with the United Kingdom.

 

https://archive.ph/0Eg6T#selection-639.0-643.39

[tnp20]

This stuff is getting so off-topic !!!!

 

Reminder: This is a China thread - to discuss both negatie, positive and informational/neutral.

 

Lack of an "ignore" button on these threads means discipline is required or has to be forced by the administrator by punishing offenders.

 

 

[Luke]

7 minutes ago, tnp20 said:

This stuff is getting so off-topic !!!!

 

Reminder: This is a China thread - to discuss both negatie, positive and informational/neutral.

 

Lack of an "ignore" button on these threads means discipline is required or has to be forced by the administrator by punishing offenders.

 

 

To be fair this is very much related to the conflicts between the two systems of China and the US. I think its important to shine a light on these topics to understand the different perspectives. 

[Ulti]

Back to China

I thought it was an excellent podcast discussing financial regression with a communist run bank run economy…. I also like the “CYA” description of todays moves to diversify supply chains vs decoupling 

[tnp20]

41 minutes ago, Luca said:

To be fair this is very much related to the conflicts between the two systems of China and the US. I think its important to shine a light on these topics to understand the different perspectives. 

 

Its a gray area but it needs to stay focused on economic effects of two systems short and long term. No one really knows how the two systems well evolve over time and are best guesses driven by certain principles.

 

But to talk about Mississippi and UK  ...come on...there was no mention of China. Thats clearly over the line !

 

There is a place to discuss Mississippi and UK ...thats in a separate thread. Similar concept could also apply if it gets to other areas of discussion that verge down a slippery slope.

 

Lets not ruin these great boards.....ignore button would fix the issue as I have mentioned but lacking ignore optionality, would devolve into wading through endless off-topic stuff to get to relevant info.

Edited August 21, 2023 by tnp20

[Luke]

32 minutes ago, tnp20 said:

But to talk about Mississippi and UK  ...come on...there was no mention of China. Thats clearly over the line !

 

There is a place to discuss Mississippi and UK ...thats in a separate thread. Similar concept could also apply if it gets to other areas of discussion that verge down a slippery slope.

 

Lets not ruin these great boards.....ignore button would fix the issue as I have mentioned but lacking ignore optionality, would devolve into wading through endless off-topic stuff to get to relevant info.

+1

[Ulti]

https://dnyuz.com/2023/08/21/as-china-falls-into-deflation-the-mood-turns-dark/

[tnp20]

^^^^ This piece is accurate on the ground picture ....in the short term its a crisis of confidence but in the long term is about the national chinese strategy and leadership of Xi.

 

I think the crisis of confidence will be resolved over time and bad times will soon be forgotten but it always seems the darkest before the dawn. Crisis confidence needs a fiscal jolt to shock the system into a positive reinforcement loop and support for the housing to stabilize it.

 

I am reading the deflation picture should abate over the next Q or so and comparison to Japan are not entirely appropriate.

 

I have said before I am short-medium term bullish but long term negative on China primarily due to Xi. He is leading China in a wrong direction and he doesnt even realize it because he has surrounded himself with loyalists.

 

Lee Kuan Yew's comments about Xi "He has iron in his blood" .....meant to imply  he is steadfast in his decision despite head winds....

 

If Yew was alive today and watching XI's actions, he would say "He has iron in his brain too".....too rigid in ideology in face of contrary indications...

 

iron in blood + iron in brain = steadfast direction but in the wrong direction without self correction ==> long term disaster.

 

Edited August 21, 2023 by tnp20

[Ulti]

31 minutes ago, tnp20 said:

have said before I am short-medium term bullish but long term negative on China primarily due to Xi.

Again I thought the odd lots podcast was spot on: debt demographics decoupling and deflation( I think i'm quoting right ).. are the major issues... having a financial regression regime run by Xi and the banks... They cant allow more capitalism because it would potentially take power away . The idea of economies of scale are risky nowadays has taken hold and this does not bode well for China....It will be interesting to see how russia China and the Brics come up with a new paradigm.

 

https://www.msn.com/en-us/money/markets/russia-china-look-to-advance-agendas-at-brics-summit-of-developing-countries-in-south-africa/ar-AA1fxSME

[tnp20]

 

If you are short China, you shoul be short NVDA and the likes....NVDA valuation is through the roof....

[Luke]

28 minutes ago, Ulti said:

Again I thought the odd lots podcast was spot on: debt demographics decoupling and deflation( I think i'm quoting right ).. are the major issues... having a financial regression regime run by Xi and the banks... They cant allow more capitalism because it would potentially take power away . The idea of economies of scale are risky nowadays has taken hold and this does not bode well for China....It will be interesting to see how russia China and the Brics come up with a new paradigm.

 

https://www.msn.com/en-us/money/markets/russia-china-look-to-advance-agendas-at-brics-summit-of-developing-countries-in-south-africa/ar-AA1fxSME

"they cant allow more capitalism because it would potentially take the power away". 

 

Away to whom?

 

Will it be for the better if China is controlled by a corporate elite? How did the neoliberal model for the US turn out since the last 30 years?, if I look at the data it turns out to be pretty bleak. Chinas local economy is brutal, turbo capitalism. Many many players, hard competition.

 

Whats important to the administration is that these mega caps dont negatively influence chinas trajectory to become prosperous. Thats why they punish parasitic business practices where wages are getting pushed down, and monopoly practices interfere with healthy competition. Its always surprising by how much investors have exited china for good but IMO based on erratic believes. Xi is not an idiot that doesnt understand markets and capitalism and basically wants to clone Mao now. But something like that spooks around in the head of all the investors that experienced their first hard bear market. We are up sometime 100%+ for many great holdings since those lows in october 2022 and i actually agree with what the administration said: "People will be slapped by reality". 

[Luke]

4 minutes ago, tnp20 said:

 

If you are short China, you shoul be short NVDA and the likes....NVDA valuation is through the roof....

Dont forget indirect revenues, If Nvidia has 45% of sales in China and they are a large customer of micron, that pushes the exposure up significantly. And then all the factories and people that developed technical skills to build the products, supply chains etc..

[Luke]

And China industrialized much later than Germany and US etc, they have a LONG runway left. They are around a level of development of a germany in 1985-1990 if you compare GDP per capita. 

 

From Pwc: 

 

• The world economy could more than double in size by 2050, far outstripping population growth, due to continued technology-driven productivity improvements
• Emerging markets (E7) could grow around twice as fast as advanced economies (G7) on average
• As a result, six of the seven largest economies in the world are projected to be emerging economies in 2050 led by China (1st), India (2nd) and Indonesia (4th)

They estimate GDP of China to be around 50 Tr USD in 2045.

 

 

China regulates exactly according to studies by as an example the OECD: 

 

It follows that policies to reduce income inequalities should not only be pursued to improve social outcomes but also to sustain long-term growth. Redistribution policies via taxes and transfers are a key tool to ensure the benefits of growth are more broadly distributed and the results suggest they need not be expected to undermine growth. But it is also important to promote equality of opportunity in access to and quality of education. This implies a focus on families with children and youths – as this is when decisions about human capital accumulation are made -- promoting employment for disadvantaged groups through active labour market policies, childcare supports and in-work benefits.

 

 

[Luke]

So which Country sets the global rules then? Will it still be a currently deteriorating europe, i dont think so? The US will be a fine economy but the party will shift to the E7.

 

Yeah and maybe the west or US doesnt like it and there will be wars or sabotage but hey, thats what always happens if we look take the past 2023 years of history. One just cant invest "around" wars. They will happen over time. If one thinks the likelihood of China and US war is high the next 10 years, then one shouldn't own many US stocks neither and maybe focus on some smallcaps in other countries that are unaffected by such an event. 

[Luke]

So owning strong businesses in either India or China for the next 20 years should turn out in some pretty nice multibaggers for sure!

[Spekulatius]

Good posts from @tnp20 here and yes keep away worthless political unrelated drivel and the scope crisp around what really matters.

 

I do wonder a bit if the CCP should try to bail out housing in general. it seems to me that a lot of housing just serves as a fairly unproductive store of value for the Chinese.

The CCP probably does not to bail out the future homeowners that have paid for their apartments (in escrow accounts) but are stuck in limbo because those apartments are skeleton building  cannot be completed by the developers because they don't have the cash to do so. it a catch 22 situation where the developer needs some cash to hit the next milestone and get cash released from the escrow accounts etc. Seems to me that some intervention needs to happen because these unfinished homes ruin not just the neighborhood, but also the future homeowners (there are several stories in youtube about Chinese homeowners document their plight) as well as the developers or more likely the banks and debt holders who supplied most of the funding.

 

This seems to be a classical case where state intervention needs to happen to break a gridlock. Beyond that, a more productive use of capital would be to move away from housing and perhaps infrastructure (which relates to new home builds) to more consumption based purposes. This also reduces Chinas dependency on manufacturing and exports.

 

That could result in a bull case for China and their economy eventually.

[james22]

2 hours ago, Luca said:

Xi is not an idiot that doesnt understand markets and capitalism and basically wants to clone Mao now.

 

And the burnt Fool's bandaged finger goes wabbling back to the Fire

[tnp20]

3 hours ago, Spekulatius said:

This seems to be a classical case where state intervention needs to happen to break a gridlock. Beyond that, a more productive use of capital would be to move away from housing and perhaps infrastructure (which relates to new home builds) to more consumption based purposes. This also reduces Chinas dependency on manufacturing and exports.

The Only Five Paths China’s Economy Can Follow

 

Any economy broadly speaking has only three sources of demand that can drive growth: consumption, investment, and trade surpluses. For that reason, there are basically five paths that China’s economy could take going forward.

1. China can stay on its current path and keep letting large amounts of nonproductive investment continue driving the country’s debt burden up indefinitely
2. China can reduce the large amount of nonproductive investment on which it relies to drive growth and replace it with productive investment in forms like new technology
3. China can reduce the large amount of nonproductive investment on which it relies to drive growth and replace it with rising consumption
4. China can reduce the large amount of nonproductive investment on which it relies to drive growth and replace it with a growing trade surplus
5. China can reduce the large amount of nonproductive investment on which it relies to drive growth and replace it with nothing, in which case growth would necessarily slow sharply

These are the same five paths, by the way, faced by every other country that has followed the high savings, high investment model. Each of these paths creates its own systemic difficulties and each, except for the first, implies substantial changes in economic institutions that, inevitably, must be associated with substantial changes in political institutions. This may be why in the end every previous country followed the last of the five paths.

 

https://carnegieendowment.org/chinafinancialmarkets/87007

 

This is a long piece from Dr. Pettis from last year but super insightful....Only paths 2 and 3 are tenable long term...they will still do path 1 but less and less so over time to ensure they hit their GDP targets and to keep the economy on an even keel whilst they transition to path 2 and 3.

 

The issue is that even at 3-4% overall GDP growth long term...there will be companies in AI/Cloud/EV/Green Tech space  that will growh exponentially as this is all new area....the risk being power structures and Xi.

 

 

 

 

Edited August 22, 2023 by tnp20

[UK]

7 hours ago, Luca said:

 Xi is not an idiot that doesnt understand markets and capitalism and basically wants to clone Mao now.

 

https://www.wsj.com/articles/xi-jinping-putin-china-russia-relations-11671030896

 

“I have a similar personality to yours,” Mr. Xi told Mr. Putin during his visit to Moscow.

 

https://www.nytimes.com/2023/08/15/opinion/china-russia-dictators-xi-putin.html

 

Aging dictators have less time to reshape the world — and more memories of being obeyed at home and dissed abroad for their conduct. They become increasingly repressive and aggressive as power goes to their heads. Surrounded by sycophants, they make disastrous decisions again and again. They start pondering their legacies and wondering why they haven’t received the global respect they think they deserve or achieved the glory that would etch their names among history’s greats. They may decide that they don’t want to go down as a merely transitional figure. It’s a combustible combination: an autocrat who is overconfident and aggrieved and in a hurry.

[Ulti]

"China’s total trade with Russia in the first seven months of this year jumped 36% from the same period a year earlier, to $134 billion, putting Moscow just behind Australia and Taiwan on the list of China’s biggest trading partners, according to trade data released last week"

 

https://www.wsj.com/world/china/booming-china-russia-trade-sends-trench-digging-machines-to-ukraines-front-lines-85f5b5ff

[Luke]