China Economic News

[CY09]

If China loans are based on their domestic rate and the world is increasing their interest, the after effects is that China will have to defend its peg if it so intends to protect its companies. China has suffiicent reserves to do this because it has a lot of US bond holdings. Holding everything constant, what would happen is that China would decide to sell off almost all its US Treasuries and maybe since it has fewer FX, they will work with Russia in importing oil and gas even more and not import oil and gas from other countries as they are usually agreed on USD basis

Its quite hard to predict what would happen if the inverted happens. But the above paragraph is my guess

[¯|_(ツ)_/¯]

@CY - make sense to me too.

If we push forward your theory a bit, Crypto currency would be another probable scenario too.



Gratitude!

[CY09]

https://www.channelnewsasia.com/cna-insi...de-2976461

An insight to the proeprty collapse of China and the factors that drove a housing boom

[Behappyalways]

"No Possibility Of Reconciliation" Any Longer: US And China Are Now "Officially In An Economic War"
https://www.zerohedge.com/markets/no-pos...onomic-war

[CY09]

The US has an upper hand in this.

SMIC progress in chip fabrication is frustratingly slow and China's intrusion into Alibaba and Tencent foray into chip development means China is a few generations (about 5-10 years) behind TSMC and Samsung.

Biden saw a weakness in the leadership run by XJP, who was keeping multiple local business actors in check, and have 'checkmate' china in the advanced AI technology and military weaponery with restrictions on advanced chips of 3, 4 & 5nm.
China will stagnate in these mentioned fields. Its akin to an F1 car who is leading but now sanctioned not to paratake in a few summers of car improvement. In the world of F1, 1-2 seasons of poor car development will lead to the car from being a race champion to a mid rank team. IMO, it urgently needs the private sector to step in chip fabrication but the CCP also favours SOEs to lead the charge than their private sector counterparts. A recent case in point Tsinghua bail out was given to SMIC despite private sector interest.

[¯|_(ツ)_/¯]

#1 challenges would still be the Dynamic zero of C19 policy.  I won't be surprise that social problem kick in and caused some headache for CCP and hence further disruptions to the world.

As we are expecting more volatility, what are you going to do now?

Enjoy: 
 
Gratitude!

[CY09]

Hi Behappyalways,

Could you explain how the 2 links provided are linked to China Economic news? There seems to be a few layers (hoops) of thinking readers have to jump through to infer. Thanks

[Behappyalways]

Honestly I hate to spent too much time explaining....so I delete it . .

Apologies....

[dreamybear]

While it's a holiday today in SG (mkt closed), not so much for those of us who invest globally .... tough life.

For an investor, is this a crisis or opportunity ?

But how should a value investor determine the intrinsic value of China's tech stocks ?

Nonetheless, for investors practising WB's investing method and if one is uncertain, perhaps it's useful to recall rule no. 1 ....

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Xi’s Power Grab Spurs Historic Market Rout as Foreigners Flee
https://www.bloomberg.com/news/articles/...p-overhaul
".... The Hang Seng China Enterprises Index, a gauge of Chinese stocks listed in Hong Kong, plunged 7.3% in its worst showing after any Communist Party congress since the inception of the index in 1994. Foreign investors fled mainland markets......

.... The market meltdown following the reshuffle, which highlighted Xi’s unquestioned grip over the ruling party, shows deep disappointment over a likely continuation of policies staked on Covid Zero and state-driven companies. Tech giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Meituan all tumbled more than 11% as investors remained skeptical that Xi and his allies will seek a rejuvenation of private enterprise...... "

[CY09]

The question is if the stock market and businesses in China are following closely to capitalism now?

Fundamentals of capitalism (a basis for stock market to reflect true value) may be gone from now on given the leadership change where there is no market reformer among the 6 top brass. This may mean it may be impossible to ever evaluate the value of a chinese company