China

[rogermunibond]

A rather good article from the FT's Martin Wolf on China GDP and growth potential.  

 

https://www.ft.com/content/8a7fb1d5-bb3a-48b7-aa72-1c522fd21063

[tnp20]

 

 

1 hour ago, rogermunibond said:

A rather good article from the FT's Martin Wolf on China GDP and growth potential.  

 

https://www.ft.com/content/8a7fb1d5-bb3a-48b7-aa72-1c522fd21063

 

Its an excellent article. They have the means to do it, except Xi likes to score own goals.

 

 

The biggest questions of all about the future of the Chinese economy concern politics, both domestic and global. Domestically, does China have a leadership that wants to continue with rapid growth or is it now inclined to view stability as more desirable? Is it prepared to take the steps needed not just to increase demand now, but to tackle the structural problems of over-saving and over-investment, over-reliance on the property market, excessive leverage, and so forth? Is it prepared to give private businesses their head once again or is it determined to keep them under firm (and inevitably daunting) control? Can it convince the Chinese people that, after the traumas of Covid, they can be confident in the future once again? Adam Posen of the Peterson Institute of International Economics has argued powerfully that they cannot. I am not convinced. They changed in the late 1970s on a far bigger scale. Of course, the leadership also changed. Will it this time, too? Or is it fixed for years ahead?

 

 

 

 

[crs223]

7 hours ago, mcliu said:

really need to get their shit together and focus on fixing the real issues

 

Crime, homeless, endless wars, money printing. Let’s assume the US does nothing to fix any of these.  How does that play out?

 

Historically (20 years) there are no consequences whatsoever.

 

Interest rates go up?  Underwhelming.  Is there a point where businesses or individuals leave?  Or worse? Is there a precedent besides “the roman empire fell, so US will fall too”?

 

I’ve heard that Singapore has essentially no homeless, no crime, and a population that cares about one another.  Is it true?

 

Sorry/not sorry to hijack…

[tnp20]

This is a bit off topic but last comment. There is a bit of politics here as it relates to leadership so be forewarned. 

 

Will China take over USA as number 1 economy in the globe ?

 

It all depends on the leadership of both countries in the coming years.

 

Xi has changed the course of China that has made it less attractive for foreign investors and foreign entrepreneurs and brilliant innovators around the world. If this direction continues, China is unlikely to take over USA (and USA led order), however Xi has at most another 10 years and of course China can course correct back on the old path (before Xi ) but by then demographics starts acting as a head wind so it becomes more difficult. Even with perfect execution and more reasonable Xi, the odds are low except if USA really screws the pooch, which by the way is not out of question on the current trends in USA.

 

The current state of leadership and politics in USA is loosing friends all over the world. The MAGA crowd and nutty republicans in house  and nutty left is doing a great job in threatening our democracy and constitutional way of life and also scaring important foreigners and allies  with the crazy rhetoric. It could be a phase and USA has always got its act together when faced with a real challenge (China currently) and perhaps it bounces back and gets back on right track but for USA to continue to beat China, it needs 3 things: (i) Trust of important allies ..Japan, Germany, India, France, Indonesia, Brazil ( support for dollar and support for US led world order/miltary) and (ii) Continued full force immigration and attraction of the best talent and entrepreneurs in the world (iii) Open society and free markets.

 

None of this is a given, and the thread of history can go in many directions. My best guess is despite the worst of leadership in the USA, there are enough entrenched advantages that we can take a lot of damage before we start loosing on the 3 important things above and give China an opening.

 

But the investment case for China, and Chinese companies is not if its number 1 GDP, but its the case of despite negatives modelled into the narrative, how will these companies perform. Many great Chinese companies are so undervalued that even if China grows without being number 1, these companies do well and investment in them produce good returns. Many US companies are so over valued that despite USA remaining number 1 GDP these companies many not do as well because it has to work off the over-valuation.

 

Tencents and BABA have the (i) E-payments business (ii) Cloud/digitazation business and (iii) AI business which will have tail wind for many years to come.

 

 

Edited September 20, 2023 by tnp20

[Spekulatius]

25 minutes ago, tnp20 said:

Will China take over USA as number 1 economy in the globe ?

For Chinese stocks to work, 6% GDP growth or taking over the USA as the largest economy is not needed and I would argue even that looking at these things is mostly irrelevant.

 

For Chinese stocks to work, XI needs to leave the economy alone more and let it do what it (or the people) wants to do. Whether it growth by 3% or 6% does not matter all that much, especially if the extra 3% growth may come from prestige projects with very little economic utility.

[Spekulatius]

LOL - percentage of lost wallets returned as a measure of honesty by country:

https://www.science.org/doi/10.1126/science.aau8712

[Luke]

18 minutes ago, Spekulatius said:

LOL - percentage of lost wallets returned as a measure of honesty by country:

https://www.science.org/doi/10.1126/science.aau8712

Very interesting research, and thanks for sharing! Quite sad for China, would have been interesting to see how they compare to the more developed asian countries like korea, japan, taiwan but thailand, indonesia and malaysia doesnt look much different.

[Spekulatius]

1 hour ago, Luca said:

Very interesting research, and thanks for sharing! Quite sad for China, would have been interesting to see how they compare to the more developed asian countries like korea, japan, taiwan but thailand, indonesia and malaysia doesnt look much different.

I will say this much. Chinese don’t care about strangers but they would much less likely steel from a family member than in most westerns societies. This applies even to  a work environment generally. I never had anything stolen at work while I worked in China. If they know you well enough, they won’t steal from you.

 

It is also noticeable that the US does not look that great in this chart either.

[crs223]

4 hours ago, Spekulatius said:

LOL - percentage of lost wallets returned as a measure of honesty by country:

https://www.science.org/doi/10.1126/science.aau8712

 

Wow.  Shameful.  probably shouldn’t let this influence me, but it is powerful.  I wish Singapore and Japan were on the list.  Notice Mexico and Peru are the only two more likely to keep the wallet if it had money in it.

 

 

Edited September 21, 2023 by crs223

[tnp20]

https://podcasts.apple.com/us/podcast/beyond-markets/id1552236298?i=1000628002104

 

I follow this guy as his predictions have been fairly accurate...worth a listen.

[UK]

11 hours ago, Spekulatius said:

LOL - percentage of lost wallets returned as a measure of honesty by country:

https://www.science.org/doi/10.1126/science.aau8712

 

Thanks! This is very interesting, didn't knew such research is available. It also confirms some of my unexpectedly pleasant personal expierence in Denmark:). Would love to see more countries included.

[Gamecock-YT]

14 hours ago, crs223 said:

 

Wow.  Shameful.  probably shouldn’t let this influence me, but it is powerful.  I wish Singapore and Japan were on the list.  Notice Mexico and Peru are the only two more likely to keep the wallet if it had money in it.

 

 

 

 

Japan probably would have broken the chart to the upside

[tnp20]

US and China to launch economy and finance working groups to stabilise ties

https://archive.ph/NV4KQ

 

https://home.treasury.gov/news/press-releases/jy1760

 

If this mechanism works, I think we will have moments of progress( economy and markets) punctuated by Xi's constant stupidity.

 

 

Edited September 22, 2023 by tnp20

[sleepydragon]

The economy in China is so bad, but political climate is becoming tighter,  more policy regulating everything, and more war planes flying around Taiwan. Confidence on the country is none, capital is gushing out of China, and CCP is scared and policing everything even more now.

 

I now feel this time it’s different. Xi is not prioritizing economy. He’s increasing his grips and he is going to prioritize his objectives first. I doubt they have the ability to start war now but I think he would want to if he can. What matters is without confidence, economy is not going to get back for next few years.

[tnp20]

Technocrats are trying to do the right thing but they are all scared of Xi so not doing what is really needed, just enough for show.

 

Xi is telling his people to eat bitterness and get ready for extreme scenarios.

 

Having said that sentiment is so bad, that there are some green shoots and things are beginning to improve....if Xi doesnt put his foot in his mouth again, things should improve naturally....if he says something  stupid from his "ideology book", all bets are off. Current "football" he is kicking around is the healthcare sector. Healthcare entrepreneurs have lost billions in last few months and hedge funds are shorting chinese helathcare.

 

Foreigners are burnt to a crisp. Many wont ever come back to China given other better options. It all comes down to Domestic investor and. their billions in savings and animal spirits ...which by itself can do the trick if they can get some confidence back.

 

 

Edited September 22, 2023 by tnp20

[UK]

5 hours ago, tnp20 said:

Technocrats are trying to do the right thing but they are all scared of Xi so not doing what is really needed, just enough for show.

 

Xi is telling his people to eat bitterness and get ready for extreme scenarios.

 

Having said that sentiment is so bad, that there are some green shoots and things are beginning to improve....if Xi doesnt put his foot in his mouth again, things should improve naturally....if he says something  stupid from his "ideology book", all bets are off. Current "football" he is kicking around is the healthcare sector. Healthcare entrepreneurs have lost billions in last few months and hedge funds are shorting chinese helathcare.

 

Foreigners are burnt to a crisp. Many wont ever come back to China given other better options. It all comes down to Domestic investor and. their billions in savings and animal spirits ...which by itself can do the trick if they can get some confidence back.

 

 

 

Some domestic investors are also voting with their feet: https://www.wsj.com/finance/chinas-economic-worries-spur-a-different-kind-of-shopping-spree-1321e607

 

Edited September 23, 2023 by UK

[sleepydragon]

3 minutes ago, UK said:

 

Some domestic investors are also voting with their feet: https://www.wsj.com/finance/chinas-economic-worries-spur-a-different-kind-of-shopping-spree-1321e607

 

that’s also why I think EWBC, the Chinese bank Li Lu invested is interesting. It appears , though I am not sure, they are taking deposits from Chinese who want to transfer their USD to America and use them to invest in US stocks.  According to the CEO, he was met by ZhuRongJi when he visited America and had lunch with a group of American CEOs( he was the only Asian CEO). I trust Li Lu must have some insights with this bank 

[Spekulatius]

Pretty interesting video about Shanghai and how it has changed:

The fellow used to live there and left early 2020 with the Covid-19 outbreak. He noticed some changes and the very few things that stayed the same.

[Spekulatius]

The spy ballon that wasn’t:

 

[Parsad]

Hmmm!

 

https://www.cnn.com/2023/09/23/business/china-too-many-homes-for-1-4-billion-people-intl-hnk/index.html

 

Cheers!

[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.

[Luke]

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.