China & hk stocks/ etfs

[Tiny Shrimp]

https://finance.yahoo.com/news/chinese-stocks-head-weekly-gain-023612619.html

Better not disappoint investors again after hyping this stimulus for weeks.

Stimulate using just words again ah

 

[d5dude]

Stimulate using just words again ah

It wont work again, expectations have been for something to be revealed after NPC, this will fall thru the floor if they talk cock again without putting up money. Current expectations are for a 6-10T RMB stimmy over 3 years.

 

[happybellyman]

6 trillion. Is that above or under expectations

 

[boringLife-]

6 trillion. Is that above or under expectations

You see A50 futures you know gg already.

But good to buy the dip

 

[Tiny Shrimp]

You see A50 futures you know gg already.

But good to buy the dip

ya looks like market pricing in low expectations............
china why you so pragmatic, not like US..........

 

[lightchaser]

You see A50 futures you know gg already.

But good to buy the dip

Chinese shares in US dropping pre mkt

 

[d5dude]

6 trillion. Is that above or under expectations

Its 6T over 3 years, another 4T over 5 years so total 10T, but this is only local govt debt swap so its quite underwhelming. Plus pt is there is (again) promises to do more fiscal stimmy in 2025. I think they are preserving ammo to fight the coming trade war with the US...

 

[stanlawj]

Copper price basically just pumped and dumped back to original price last week Friday. The good thing is that it is not lower.

Copper price is a good indicator of Chinese economy.

 

[aurvandil]

Plus pt is there is (again) promises to do more fiscal stimmy in 2025.

Hope springs eternal ...

 

[sky1978]

ya looks like market pricing in low expectations............
china why you so pragmatic, not like US..........

I thought everyone was complaining China's problem is that of overcapacity.

How can throwing in more money resolve overcapacity? Even if they give everyone 10k to spend this year, those excess capacity will not go away magically.

 

[d5dude]

Its 6T over 3 years, another 4T over 5 years so total 10T, but this is only local govt debt swap so its quite underwhelming. Plus pt is there is (again) promises to do more fiscal stimmy in 2025. I think they are preserving ammo to fight the coming trade war with the US...

Btw the local govt debt swap is not left pocket to right pocket like some people think it is. There is a fiscal crisis in many local govts in China now, this is due to their inability to refinance their hefty debt loads at low interest rates, there are debt ceilings for local govts so they have to refinance via LGFVs (shadow debt), and those are extremely costly. Many local govts have cut spending to the bone, some forced to lay off workers, cut salaries or find other ways to extract $$$ from people/companies.

A debt swap essentially involves raising the debt ceiling for local govts, the interest load is also lower since local govt debt is quasi sovereign. Ideal situation would be for the central govt to take on more debt, I guess this is better than nothing for now.

 

[d5dude]

I thought everyone was complaining China's problem is that of overcapacity.

How can throwing in more money resolve overcapacity? Even if they give everyone 10k to spend this year, those excess capacity will not go away magically.

Why not? There is overcapacity because consumption is weak, like I said before China's share of consumption as a % of its GDP is extremely low compared to most countries.

 

[boringLife-]

I was looking at bloomberg commentary can tell the westerners full of crap and anti ccp 1.

Their so called "expectations" figures dont know plug from where 1 then everytime numbers not as expected, they will be like fk the ccp, what a retard. SELL!!

 

[sky1978]

Why not? There is overcapacity because consumption is weak, like I said before China's share of consumption as a % of its GDP is extremely low compared to most countries.

On the part regarding household consumption, you can listen to the video which Stanlawj posted this morning, the one where they interview Han Feizi. If you are short of time, just start from 23min to 30min. They mentioned household consumption numbers in China are missing out on the rent, insurance and non-retail sales payments, so when people compare the 70% in the US vs the 30% in China, it is not an apples-to-apples comparison. He estimates that the actual number might be closer to 60%.

The only thing I fact-check is when they mentioned that China is already eating better, in terms of more protein compared to the US. For the rest of the content, if you have doubts, you can do further research. There is a limit to how much a person can eat and how often they change their phone or cars etc.....

https://www.business-standard.com/w...intake-india-falls-behind-124071800427_1.html

On top of that, the consumers cannot resolve overcapacity in industrial goods. China has 1000GW of solar manufacturing capacity, and their peak hourly demand is less than 1200GWh. If they installed new 1000GW of solar panels, a big bulk of the production would simply go to waste.

https://www.reuters.com/world/china...e-121-this-winter-energy-official-2023-10-30/

https://www.reuters.com/world/china/chinas-solar-capacity-expected-hit-1000-gw-by-2026-rystad-energy-2023-09-12/#:~:text=Sept 12 (Reuters) - China's,a note published on Monday.

Then we can take a look at their battery production capacity. They are going to hit 6TWh or 6000GWh production capacity soon. Assuming each EV on average has a 60KWh battery, they have sufficient capacity to equip 100mil EVs each year and the global car sales annually is only around 70mil to 80mil. Other parts of the world still have 2TWh production capacity.

https://about.bnef.com/blog/china-already-makes-as-many-batteries-as-the-entire-world-wants/

Many other industries like steel-making or construction-related industries are also operating below peak capacity. If you are one of those who think China anyhow throw money into fanciful infrastructure and that there are excess houses already, then the only solution is to downsize them rather than prop them up artificially to build things that are not necessary. Perhaps they should only restart and carry on building those houses which people already paid money for and then spend money to upgrade or refurbish existing homes like our HDB upgrading. But massive resources should not be going into those sectors already.

For their EV capacity, they are closing in on the 36 mil capacity mark, and that does not include their older ICE vehicle capacity. 36mil EV production capacity vs 70mil new car global demand annually (EV + ICE).

https://kr-asia.com/chinas-ev-overcapacity-spurs-global-fears-of-more-price-cuts

Hence, consumer spending alone cannot resolve overcapacity in those high-value and industrial goods segments. If we dig deeper and expand to more industries, many will probably face the same problem.

 

[Tiny Shrimp]

moithinks the west so hostile to china now
china also duno wanna friend them liao

cultivate qi in their own backyard SEA better

 

[stanlawj]

Many other industries like steel-making or construction-related industries are also operating below peak capacity. If you are one of those who think China anyhow throw money into fanciful infrastructure and that there are excess houses already, then the only solution is to downsize them rather than prop them up artificially to build things that are not necessary. Perhaps they should only restart and carry on building those houses which people already paid money for and then spend money to upgrade or refurbish existing homes like our HDB upgrading. But massive resources should not be going into those sectors already.

For their EV capacity, they are closing in on the 36 mil capacity mark, and that does not include their older ICE vehicle capacity. 36mil EV production capacity vs 70mil new car demand daily (EV + ICE).

https://kr-asia.com/chinas-ev-overcapacity-spurs-global-fears-of-more-price-cuts

Hence, consumer spending alone cannot resolve overcapacity in those high-value and industrial goods segments. If we dig deeper and expand to more industries, many will probably face the same problem.

China needs to spend more on R&D in many industries. Not just on those cars and semiconductors. My opinion is those Chinese ppl like to take short-cuts and skip R&D by copying/cloning competitors with very little modifications. Then they ramp up production with tiny profit margins and try to undercut the competitors. What we end up with are garbage products cornering the market.

 

[sky1978]

China needs to spend more on R&D in many industries. Not just on those cars and semiconductors. My opinion is those Chinese ppl like to take short-cuts and skip R&D by copying/cloning competitors with very little modifications. Then they ramp up production with tiny profit margins and try to undercut the competitors. What we end up with are garbage products cornering the market.

Over the past few years, China registered more patents than the rest of the world combined.
https://stcsm.sh.gov.cn/english/News/20231218/c58da741df4c43cf9ea679781f4c76b3.html

China's actual R&D spending is only 2nd to the US, 670bil vs 800bil. On a per GDP basis, China probably would have surpassed the US.
https://sciencebusiness.net/news/international-news/us-holds-china-challenge-global-rd-spending-race

 

[d5dude]

On the part regarding household consumption, you can listen to the video which Stanlawj posted this morning, the one where they interview Han Feizi. If you are short of time, just start from 23min to 30min. They mentioned household consumption numbers in China are missing out on the rent, insurance and non-retail sales payments, so when people compare the 70% in the US vs the 30% in China, it is not an apples-to-apples comparison. He estimates that the actual number might be closer to 60%.

Those are views from a random guy in a random podcast, its pure conjecture, not evidence. The National Bureau of statistics of China have numbers on this and they already include residence and household services under household expenditure/consumption. There is some argument on whether using historical cost instead of imputed rent distorts this number but it can work both ways i.e this number is inflated when property prices fall.

The only thing I fact-check is when they mentioned that China is already eating better, in terms of more protein compared to the US. For the rest of the content, if you have doubts, you can do further research. There is a limit to how much a person can eat and how often they change their phone or cars etc.....

https://www.business-standard.com/w...intake-india-falls-behind-124071800427_1.html

Most of that protein isnt meat protein (which is costlier). Anyway the problem isnt food, global food prices at pretty much at record highs so there is no overcapacity there.

On top of that, the consumers cannot resolve overcapacity in industrial goods. China has 1000GW of solar manufacturing capacity, and their peak hourly demand is less than 1200GWh. If they installed new 1000GW of solar panels, a big bulk of the production would simply go to waste.

https://www.reuters.com/world/china...e-121-this-winter-energy-official-2023-10-30/

https://www.reuters.com/world/china/chinas-solar-capacity-expected-hit-1000-gw-by-2026-rystad-energy-2023-09-12/#:~:text=Sept 12 (Reuters) - China's,a note published on Monday.

Then we can take a look at their battery production capacity. They are going to hit 6TWh or 6000GWh production capacity soon. Assuming each EV on average has a 60KWh battery, they have sufficient capacity to equip 100mil EVs each year and the global car sales annually is only around 70mil to 80mil. Other parts of the world still have 2TWh production capacity.

https://about.bnef.com/blog/china-already-makes-as-many-batteries-as-the-entire-world-wants/

Many other industries like steel-making or construction-related industries are also operating below peak capacity. If you are one of those who think China anyhow throw money into fanciful infrastructure and that there are excess houses already, then the only solution is to downsize them rather than prop them up artificially to build things that are not necessary. Perhaps they should only restart and carry on building those houses which people already paid money for and then spend money to upgrade or refurbish existing homes like our HDB upgrading. But massive resources should not be going into those sectors already.

For their EV capacity, they are closing in on the 36 mil capacity mark, and that does not include their older ICE vehicle capacity. 36mil EV production capacity vs 70mil new car global demand annually (EV + ICE).

https://kr-asia.com/chinas-ev-overcapacity-spurs-global-fears-of-more-price-cuts

Hence, consumer spending alone cannot resolve overcapacity in those high-value and industrial goods segments. If we dig deeper and expand to more industries, many will probably face the same problem.

That is the problem, isnt it? China has massive excess capacity because their entire economy is geared towards manufacturing goods that the govt thinks the market want, this is the downfall of a centrally planned, top-down economy.

In a normal market based economy that isnt distorted by industrial policies, participants in the market take signals in the form of price, they produce more when prices rise, less when prices fall. They dun produce X number of widgets because the govt told them to and/or that they'd be able to dump the excess capacity in other markets. China's photovoltaic industry is a very good example of this, Chinese companies' losses only widened as they captured more market share. This negative unit economics is of course, great for consumers since they generate consumer surplus, but its bad for the economy and certainly terrible for investors.

 

[stanlawj]

Over the past few years, China registered more patents than the rest of the world combined.
https://stcsm.sh.gov.cn/english/News/20231218/c58da741df4c43cf9ea679781f4c76b3.html

China's actual R&D spending is only 2nd to the US, 670bil vs 800bil. On a per GDP basis, China probably would have surpassed the US.
https://sciencebusiness.net/news/international-news/us-holds-china-challenge-global-rd-spending-race

Perfect rebuttal below. Which is why Xi Jin Ping is always emphasizing high quality development. Because the ordinary Chinese businessmen still do too little R&D that is productive. China big tech and SOEs are leading the way in commercialising patents.

"China publishes an ENORMOUS amount of papers, most of them useless. But who started this? And who made it a meaningless corrupt system that kills real innovation? The West. So, what really counts? Well, actual products that generate revenues and profits. Patents can both stimulate and prevent innovation. Their net effect may not even be positive. The fact that they're so expensive means individual inventors can never benefit from them. So in the end, the number of patents means little. Just like satellite pictures don't tell you anything about GDP. But the success of companies such as Huawei, BYD, CATL, etc., is the real measure of innovation."

 

[stanlawj]

The countermeasure against USA's import tariffs is to diversify export markets.

https://asiatimes.com/2024/11/central-asias-ripe-demographics-form-a-key-geopolitical-node/

Central Asia’s ripe demographics form a key geopolitical node​

China, Russia and Turkey have strong stakes in youthful region’s development while US and West are wholly absent