China Economic News

I disagree that the government is in the best position to dictate take-rates. Government should actively prevent/discourage anti-consumer/anti-competitive behaviors, but market forces and natural competition should determine take-rates.

https://www.channelnewsasia.com/asia/rec...es-2765441

Things dont seem to be going well in China. Youth unemployment is reaching a ratio of 1 in every 5 youths (close to 20%)
And the government's constant regulations has spooked the tech, education sector from hiring. China is reaching a record down point which is further worsened by its zero covid policy.

To me, the emperor seems to have outlived his purpose and is now seen as incapable.

"You either die a hero or live long enough to see yourself become a villain"

Normally the dog wags the tail. Now the tail wags the dog.

The CCP can force policies down the throat of their corporate giants. The corporate giants can abide and then do things within their control (like employment) to indirectly nudge the CCP.

The more bad news (lower profits and cutting employment as a result of that) is only going to make it better for these corporate giants. By the end of the day, everyone (CCP and corporate giants) sees where are the breaking points/red lines and learn to live together harmoniously.

There are always worries. And it is easy to predict gloom and doom. But humans will always find a way, I suppose.

From property to lockdowns, what to watch in China's second half

China is subject to a "Covid Business Cycle (CBC)," Nomura Holdings economists argued in a recent note. First, increasing cases trigger business closures. Once cases come down, government stimulus leads activity to rebound, possibly leading to a new surge in Covid cases. With new variants such as BA.5 recently detected in several cities, the pace and length of lockdowns is deeply unpredictable.

https://www.businesstimes.com.sg/global-...econd-half

https://dailycaller.com/2022/07/23/zero-...g-country/

Given the poor management by President Xi Jinping on the COVID issue and his increasing restriction of the rich who are not with him, it is no surprise that many of the Chinese Rich are leaving China.

Singapore has been one of the main beneficiary of this as a large amount of cash has swarm to Singapore with the setting up of family offices. Similarly Yangzijiang Finance is doing the same by moving its half of its cash holdings from China to Singapore and setting up an asset management/family office section.

The large cash outflow is no doubt one of the driving factors for our continuous property price growth, but it is also reflects how poor President Xi Jinping has managed China

(24-07-2022, 05:09 PM)CY09 Wrote: https://dailycaller.com/2022/07/23/zero-...g-country/

Given the poor management by President Xi Jinping on the COVID issue and his increasing restriction of the rich who are not with him, it is no surprise that many of the Chinese Rich are leaving China.

Singapore has been one of the main beneficiary of this as a large amount of cash has swarm to Singapore with the setting up of family offices. Similarly Yangzijiang Finance is doing the same by moving its half of its cash holdings from China to Singapore and setting up an asset management/family office section.

The large cash outflow is no doubt one of the driving factors for our continuous property price growth, but it is also reflects how poor President Xi Jinping has managed China

I wouldn't say its poor management at all, everything China has done so far has been perfectly calculated.

The new COVID strains are wreaking havoc in many parts of the world right now and many countries healthcare system is under siege. Even if you open fully, people go to work and still get sick, and still have to take MC and stay off work for at least a week. Doesnt really help productivity that much whether you WFH or at the office. In overcrowded Chinese cities its no joke to let a pandemic virus run rampant.  

But there is another side to the story. Notice how by doin lockdowns (even now most of shanghai and big cities are in lockdown, not whole cities but any areas or building with outbreaks will be locked down.) its slows chinese economy, it also gives a convenient excuse for china to slowdown production and exports to USA. This has worsened the inflation in USA and causes much hardship for americans!!(even the mighty elon musk had to lay off workers and recently sell his bitcoin) They know that in response, FED has no choice but to raise interest rates and thus plunge the nation into a recession. Combined they have achieved STAGFLATION in the USA. 

This is also causing a similar effect in EUROzone. ECB has just been forced to raise rates by 50 basis points!!! from negative to zero rates, what do you think will happen to all those PIIGS countries now, Eurozone contagion 2.0?? Add in the lack of fuel from Russia this winter/ lack of goods from China/ lack of Credit from ECB --> EUrozone massive stagflation is likely accelerate the breakup of NATO. 

With problems abound at home, USA will be less well equipped and less focussed on the Ukrainian conflict. In fact, this year end election would likely see democrats losing to republicans.

IMHO China is setting the stage well for the rise of digital Yuan and chinese reserve currency. When there is a global depression/stagflation and loss in faith in the USD, guess who has the most gold reserves ready to back their currency? guess who has the worlds first digital currency to facilitate that? In fact last year Chinese did a big undersea and overland PEACE fiber optic cable from china to pakistan and also africa  and up to france.  Its all coming together. Next step probably just take back Taiwan by force whilst the Americans are fighting each other.

Whether well managed or not, Cash outflow from China will always happen as the rich will always diversify their assets overseas. In the end SG is just a small market, insignificant to China really.

https://www.straitstimes.com/business/pr...ate-report

I dont comprehend China but if the report does have a good degree of truth. Shouldn't it continue to be published.

This reminds me of the Class 90.5 Radio advert- "hear only the good stuff". Maybe its a repeat this time for the Chinese Communist Party

When investing in China counters, one must consider political/country risk. Looking at the way how China handles covid, there might be some truths in the below tweets.


https://mobile.twitter.com/adam_ni/statu...0637041664

The situation in China is not good to be honest- there are 65 million completed empty homes and a few tens more that are to be built and ready. On the demand side, their population growth is stagnating. This means demand for housing be it rental/owned will be below supply.

This is ironic considering that China has a population of 1.4 billion yet it has somehow managed to overbuild. Li Keqiang is right- to solve the over housing problem, one way is to open up and attract foreigners to enter to stay. But the actions by Xi Jinping is that China is closing up instead and foreigners will not want to live in such a country. It is likely XJP will need to find a way to solve the housing overbuild

Li Keqiang was also the vice premier who said that tech regulations should come to an end in end March 2022. However, the CCP has not stopped its tech regulations. This has spooked the china tech sectors and they have not hesitated to axe workers. The axing of workers makes things worse as workers are going to find it hard to fund their mortgage instalments.

In terms of economic implementation, Li Keqiang words are probably the most logical in solving China's problems in the short term. However, he is merely a vice premier and will not be elected the president in the upcoming meeting. XJP on the other hand seems to be following the path of Mao Zedong where he wants to be viewed as a charismatic leader drumming up a legion of nationalist pride via the internet brigade on weibo. However, in terms of economic history, we know Mao Zedong did terrible economic policies which resulted in the great famine in China which killed millions and yet the China population ppl loved Chairman Mao despite their suffering.

This could be a repeat

(21-08-2022, 03:10 PM)CY09 Wrote: The situation in China is not good to be honest- there are 65 million completed empty homes and a few tens more that are to be built and ready. On the demand side, their population growth is stagnating. This means demand for housing be it rental/owned will be below supply.

This is ironic considering that China has a population of 1.4 billion yet it has somehow managed to overbuild. Li Keqiang is right- to solve the over housing problem, one way is to open up and attract foreigners to enter to stay. But the actions by Xi Jinping is that China is closing up instead and foreigners will not want to live in such a country. It is likely XJP will need to find a way to solve the housing overbuild

Li Keqiang was also the vice premier who said that tech regulations should come to an end in end March 2022. However, the CCP has not stopped its tech regulations. This has spooked the china tech sectors and they have not hesitated to axe workers. The axing of workers makes things worse as workers are going to find it hard to fund their mortgage instalments.

In terms of economic implementation, Li Keqiang words are probably the most logical in solving China's problems in the short term. However, he is merely a vice premier and will not be elected the president in the upcoming meeting. XJP on the other hand seems to be following the path of Mao Zedong where he wants to be viewed as a charismatic leader drumming up a legion of nationalist pride via the internet brigade on weibo. However, in terms of economic history, we know Mao Zedong did terrible economic policies which resulted in the great famine in China which killed millions and yet the China population ppl loved Chairman Mao despite their suffering.

This could be a repeat

As I have often harped about, China is very likely to end up like Japan 2.0. Currently that trajectory is gaining pace with negative population growth and a property sector that is finally reaching its end game.

Xi has no choice but to clamp down on all the out of control bubbles in tech sector and property sector, otherwise things will eventually fall apart and he would have zero control and be blamed for it. At least now he has an excuse to say the gov was proactive in clamping down on all those bubbles even though its resulting in a lot of pain.. 

However China does have the BRICS gold currency in progress as well as other financial innovation like digital yuan and CIPS system which will be able to facilitate trade should the world give up on USD/SWIFT system. That may be their saving grace from ending up like Japan(THIS COULD BE A REPEAT  ).