China & hk stocks/ etfs

[stanlawj]

wah, how to interpret this?
inflationary or what?

Means stimulate domestic demand instead of RMB devaluation against USD.
I hope there won't be another artificially induced RMB devaluation against USD. As mentioned in previous post, I think this devaluation is detrimental to ordinary Chinese. It only benefits the rich in China who owns alot of assets that can protect them from such devaluations.

 

[stanlawj]

Stil no sign that PBoC is defending the RMB.

 

[sky1978]

wah, how to interpret this?
inflationary or what?

Supplier A meets the made-in-China requirement and submits a bid for 125 dollars, they are given 20% off and their bid price will be taken as 100 dollars even though the contract still pays 125 dollars.

Supplier B who did not meet the requirement but submitted a bid for 110 dollars will lose out.

In other words, supplier B will be forced to localise all the sub-components production/procurement if they want a pie of the government contracts. It will only be inflationary if China's suppliers are uncompetitive and must sell higher than their counterparts using imported components which is rare. Broadly speaking, such a move will cut down on imports if there are alternatives available in their local market. For those components that must survive on imported components, whoever managed to innovate and get it made in China will have the first mover advantage to become a monopoly and earn big bucks.

 

[stanlawj]

Supplier A meets the made-in-China requirement and submits a bid for 125 dollars, they are given 20% off and their bid price will be taken as 100 dollars even though the contract still pays 125 dollars.

Supplier B who did not meet the requirement but submitted a bid for 110 dollars will lose out.

In other words, supplier B will be forced to localise all the sub-components production/procurement if they want a pie of the government contracts. It will only be inflationary if China's suppliers are uncompetitive and must sell higher than their counterparts using imported components which is rare. Broadly speaking, such a move will cut down on imports if there are alternatives available in their local market. For those components that must survive on imported components, whoever managed to innovate and get it made in China will have the first mover advantage to become a monopoly and earn big bucks.

Good explanation. I thought of something like that too but sounded quite nonsensical to me, but your explanation makes it clear. It's a strange measure to me, but it should work on stimulating demand for locally produced goods. The measure also states that it does not distinguish between local ownership or foreign ownership of the manufacturer as long as the production is local.

 

[sky1978]

Means stimulate domestic demand instead of RMB devaluation against USD.
I hope there won't be another artificially induced RMB devaluation against USD. As mentioned in previous post, I think this devaluation is detrimental to ordinary Chinese. It only benefits the rich in China who owns alot of assets that can protect them from such devaluations.

How would a devaluation impact the ordinary Chinese when they are self-sufficient in almost everything? We need to strong currency to fight inflation, but they don't, because they can produce almost all the basic foods and consumables. Even for luxury imported food like certain meat products from Japan, they already have the same breed inside China. On the contrary, the impact is more for the rich because their spending power on overseas trips will get cut.

During Trump's first term, his administration already branded them as currency manipulators. By the end of this year, their surplus is probably going to hit 1T, which is close to doubling the amount (2019) when Trump left office in early 2020. Past few years, the focus from the outside world has been on how bad things are inside China, so the currency manipulator theme is off the table and they took the opportunity to devalue and happily earn a huge surplus. If they cannot export to the US, they simply export semi-finished goods to other countries that will do the final assembly. Just take a look at the trade flow from China to Vietnam, Mexico, Thailand, Malaysia and even Singapore, they all had a big surge around 2020 and held at the same level till now.

https://www.statista.com/statistics/263632/trade-balance-of-china/
https://www.businesstimes.com.sg/in...-record-us1-trillion-trade-surplus-worlds-ire

 

[sky1978]

Good explanation. I thought of something like that too but sounded quite nonsensical to me, but your explanation makes it clear. It's a strange measure to me, but it should work on stimulating demand for locally produced goods. The measure also states that it does not distinguish between local ownership or foreign ownership of the manufacturer as long as the production is local.

One of their wish lists is probably for their Airbus A320 engine to be localised inside China because they are currently made in the US and Europe and their own C919 uses the same engine. Airbus has assembly factories in China (for A320), but the engine is still imported. If China engine manufacturers are closing in on having an alternative, they probably have no choice but to set up factories in China now as it will take years to build and start production. There might be many more others falling into a similar category.

 

[d5dude]

Stil no sign that PBoC is defending the RMB.

China's annual inflation rate came in slightly lower than expected at 0.2% in November, decreasing from the 0.3% figure registered last month, the country's National Bureau of Statistics revealed in its report published on Monday. On a monthly basis, consumer prices declined by 0.6%, against a 0.3% drop registered in the previous month. Additionally, the Producer Price Index (PPI) declined by 2.5% year-on-year, marking a lower-than-anticipated drop and coming in lower than last month's 2.9% decline.


Not gonna happen when inflation is near zero, also household consumption’s contribution to GDP fell sharply to 29% in Q3 2024, down from 47% in Q2 and 59% pre-pandemic.

Its clear that firms with high exposure to Chinese domestic demand e.g retail platforms will continue to be hit until this changes, and we havent even factored in the impact of the upcoming trade war.

 

[boringLife-]

Whats going on? My china etf suddenly shoot up

 

[DevilPlate]

Expecting that giam cai mia Leong to come in and shout Green Dragon Lets go!

 

[Mephist0pheLes]

Whats going on? My china etf suddenly shoot up

Chinese leaders jus announced they going to losen monetary policy and increase fiscal stimulus. But the usual lah, need wait for details.

 

[ctan84]

Expecting that giam cai mia Leong to come in and shout Green Dragon Lets go!

Actually why is it Green Dragon and not red? Coz I thought in China its the opposite; red = rise, green = drop? Mayb that's y China keep dropping coz Masterleong keeps chanting "green dragon" thinking it will huat, but in reality since green = drop, the chanting just keeps pushing the market down instead.

 

[d5dude]

Whats going on? My china etf suddenly shoot up

This? Looks like more rate, RRR cuts and yuan devaluation is coming.

https://finance.yahoo.com/news/china-eases-monetary-policy-stance-073152230.html

 

[boringLife-]

This? Looks like more rate, RRR cuts and yuan devaluation is coming.

https://finance.yahoo.com/news/china-eases-monetary-policy-stance-073152230.html

Huat huat. Dragon is coming back

 

[mooseolly]

Buy buy buy, my baba loss is coming back.

 

[stanlawj]

Hao Hong explains it well!!

"Politburo conference vows to implement “moderately lose policy, more proactive fiscal policy and more unconventional counter-cyclical adjustments”. It also says to “stabilize the stock market and property market”.

Only in 2008/2009 during the global financial crisis did China use words such as “moderately loose policy”. The meeting reiterates stabilizing the housing and the property market, as previous politburo meeting in September did. It also mentions “stimulating consumption” before “promoting investment”.

While much of the communique is just plain and simple Chinese, but in Chinese official pronouncements the order and the subtle changes of wording are important. The market seems to get the guessing game, and is rushing to buy up everything China."

 

[MasterLeong888]

Green dragon lets go!

 

[stanlawj]

China will ban Nvidia chips?

https://www.globaltimes.cn/page/202412/1324672.shtml

China’s top market regulator launches probe into NVIDIA over suspected breach of anti-monopoly law

The State Administration for Market Regulation has launched an investigation into NVIDIA over suspected violations of China’s Anti-monopoly Law and the notice regarding restrictive conditions outlined in the 2020 antitrust review of its acquisition of Mellanox Technologies, China’s top market regulator announced on Monday.

 

[stanlawj]

China Beige Book says the incoming new credit data needs to show improvement. Authorities like to talk alot but data usually don't show any improvement in the actual market on-the-ground. If biz are still reluctant to borrow, there is still no domestic economic expansion.

 

[DevilPlate]

China Beige Book says the incoming new credit data needs to show improvement. Authorities like to talk alot but data usually don't show any improvement in the actual market on-the-ground. If biz are still reluctant to borrow, there is still no domestic economic expansion.

Need to stabilise property market and prop up stock market first…..then their people will feel rich and spend

US playbook lolol

 

[boringLife-]

Once again dragon havent start flying kena shot down