China Economy Megathread

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Ardennes: May 12, 2002

shrike82 posted:

Mar 27 2014

Yeah, a couple months before Chinese reserves peaked I may add.

# ? Apr 21, 2015 20:42

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# ? May 12, 2024 19:41

VideoTapir: Oct 18, 2005; He'll tire eventually.

My wife has been talking about her sister's investment in what she only refers to as a "基金." I'm not sure if she's talking about a mutual fund, or something else. She is adamant that it is impossible for her sister to lose all her money, and that "it just go up little by little every day, you can watch it. It go down a little some day but then it go back up." Also "how it possible for to lose all its value?"

It's clear she doesn't know anything about investment markets. She doesn't even know in any more detail what kind of investment her sister has. (I should HOPE her sister does...)

Are there any good web sites in Chinese which explain different kinds of investments, how they work, how they can lose, and how bubbles and crashes work? I don't think I'm going to get through to her right now, as she's a little upset about my insistence that it is in fact possible to lose everything.

# ? Apr 24, 2015 00:17

ProfessorCurly: Mar 28, 2010

Do you suspect it's an outright Ponzi scheme? I'm in an economics program, I will ask my Chinese coworker for suggestions for such websites if no one else has any ideas by tomorrow.

# ? Apr 24, 2015 01:10

Nintendo Kid: Aug 4, 2011; by Smythe

Are there any quick Chinese summaries on the 1929 stock market crash in America? If you could find one of those that should be enough for her.

Also maybe find a way for her to invest in like generic American municipal bonds if that's possible, if she insists on investing in something.

# ? Apr 24, 2015 01:15

Ceciltron: Jan 11, 2007; Text BEEP to 43527 for the dancing robot!; Pillbug

It shouldn't be hard to explain that stocks are literally "an owning part of a thing" and that if nobody will pay anything for the thing, it is worth nothing.

# ? Apr 24, 2015 01:24

whatever7: Jul 26, 2001; by LITERALLY AN ADMIN

There is talk of the 2008 Chinese stock crash will repeat this year. I was in China during '08.

I have a good feeling it will come this year.

# ? Apr 24, 2015 02:17

VideoTapir: Oct 18, 2005; He'll tire eventually.

ProfessorCurly posted:

Do you suspect it's an outright Ponzi scheme? I'm in an economics program, I will ask my Chinese coworker for suggestions for such websites if no one else has any ideas by tomorrow.

No reason to suspect that, but my wife wouldn't be equipped to tell the difference, and I'm not sure her sister is.

Nintendo Kid posted:

Are there any quick Chinese summaries on the 1929 stock market crash in America? If you could find one of those that should be enough for her.

Also maybe find a way for her to invest in like generic American municipal bonds if that's possible, if she insists on investing in something.

My sister in law is saying that the situation that happened in the US won't happen in China because the government will stop it.

So far I've only replied that the government can't stop it, they can only slow it.

I haven't made an attempt at reading it, but at a glance I can tell the Chinese wikipedia article for "Economic Bubble" is not very comprehensive.

VideoTapir fucked around with this message at 02:44 on Apr 24, 2015

# ? Apr 24, 2015 02:38

caberham: Mar 18, 2009; by Smythe; Grimey Drawer

Crash or no crash I made more money. I'm going to reinvest for one more roller coaster ride.

And what's the name of the Financial product VideoTapir? The biggest one I think is Ali-fund by Alibaba. It's on average 10% yearly gain 4 years straight and you just transfer money from your alipay account. There were quite a few stock crashes in the Chinese market, it's just that lots of people are only starting to get involved in retail trading because capital controls are slowly being eased off. Financial products are actually hard for Chinese retail investors to buy, they have to jump through a lot of hoops. So you end up with shadow banks and proxy trades :suicide:

# ? Apr 24, 2015 02:50

Nintendo Kid: Aug 4, 2011; by Smythe

VideoTapir posted:

My sister in law is saying that the situation that happened in the US won't happen in China because the government will stop it.

So far I've only replied that the government can't stop it, they can only slow it.

Inform her that China's government stopping it means you at best only lose a small amount, but more likely lose most of it. Because the only way to stop it is to clamp down so hard that there ain't gonna be any easy money.

# ? Apr 24, 2015 02:55

VideoTapir: Oct 18, 2005; He'll tire eventually.

I don't want to completely dissuade her. I mean I presume she has at least a sliver of financial education (she has a degree in port management of all things) , but it's clear she doesn't know what she's doing. This isn't something one should do unless you understand it.

# ? Apr 24, 2015 03:10

My Imaginary GF: Jul 17, 2005; by R. Guyovich

VideoTapir posted:

My wife has been talking about her sister's investment in what she only refers to as a "基金." I'm not sure if she's talking about a mutual fund, or something else. She is adamant that it is impossible for her sister to lose all her money, and that "it just go up little by little every day, you can watch it. It go down a little some day but then it go back up." Also "how it possible for to lose all its value?"

It's clear she doesn't know anything about investment markets. She doesn't even know in any more detail what kind of investment her sister has. (I should HOPE her sister does...)

Are there any good web sites in Chinese which explain different kinds of investments, how they work, how they can lose, and how bubbles and crashes work? I don't think I'm going to get through to her right now, as she's a little upset about my insistence that it is in fact possible to lose everything.

Watch the PBS documentary on the stock crash of '29 with your wife?

VideoTapir posted:

I don't want to completely dissuade her. I mean I presume she has at least a sliver of financial education (she has a degree in port management of all things) , but it's clear she doesn't know what she's doing. This isn't something one should do unless you understand it.

Bad assumption. Your wife's sister put all her family's money in a ponzi scheme, and is now trying to recruit your wife (potentially for some promised 'bonus' or kickback from the fund).

# ? Apr 24, 2015 03:31

caberham: Mar 18, 2009; by Smythe; Grimey Drawer

Yeah there's always going to be some big crash, but in this day and age, wages aren't really going anywhere. Not necessarily dump everything into that one hot stock, but have a basket of investments and a steady portfolio with monthly contributions. What are you guys going to do with your excess money, put it into your regular savings account :laffo:

A term deposit account ?

Heck, she can even go RON PAULLLL and buy some spot gold ETF or related fund. When you hit 30 and have 0 investments /long term savings plan you are pretty hosed

# ? Apr 24, 2015 03:50

I would blow Dane Cook: Dec 26, 2008

caberham posted:

Heck, she can even go RON PAULLLL and buy some spot gold ETF or related fund. When you hit 30 and have 0 investments /long term savings plan you are pretty hosed

Ron Paul would never buy paper gold, purestrain only.

# ? Apr 24, 2015 04:04

Arglebargle III: Feb 21, 2006

caberham posted:

When you hit 30 and have 0 investments /long term savings plan you are pretty hosed

Bourgeois as gently caress.

# ? Apr 24, 2015 04:15

CIGNX: May 7, 2006; You can trust me

I don't see why you shouldn't completely dissuade her. There are loads of failed investment schemes and products that were sold to retail customers in recent years.

I'm not sure how well your wife or sister-in-law will take to this argument, but here's a thought experiment. Since 2009, China's banks created about $16 trillion USD in new loans to fund to a hodgepodge of investments. Some were profitable, but many were not. For reference, the US banking system has about $14 trillion in assets/loans. 6 years since, what investments could there be that are that profitable for that long and were overlooked during the boom years? How likely is it that whoever your sister-in-law is giving money to could actually find such profitable investment? Do you think that if such investments existed, they'd tell regular folks like your sister-in-law about it?

Here's another possible argument: why expect this government to protect their money? The government doesn't do a very good job with protecting people in other ways (food safety, environmental regulation, social welfare, rule of law, etc). How would it suddenly become so competent at protecting people financially?

I'm just spitballing arguments here, I really don't know if any of this would stick now that financial-bubble fever has settled in.

# ? Apr 24, 2015 04:27

VideoTapir: Oct 18, 2005; He'll tire eventually.

My Imaginary GF posted:

Watch the PBS documentary on the stock crash of '29 with your wife?

Bad assumption. Your wife's sister put all her family's money in a ponzi scheme, and is now trying to recruit your wife (potentially for some promised 'bonus' or kickback from the fund).

It was something like 10,000 RMB, not all her family's money. I just don't want her getting overconfident and going all in.

# ? Apr 24, 2015 05:02

caberham: Mar 18, 2009; by Smythe; Grimey Drawer

Get this book: 4 pillars of investing in Chinese

http://www.amazon.cn/%E5%9B%BE%E4%B9%A6/dp/9862350377/ref=sr_1_8?ie=UTF8&qid=1429856476&sr=8-8&keywords=%E6%8A%95%E8%B3%87%E9%87%91%E5%BE%8B

More about long term savings. You won't be rich but at least it beats having no savings plan at all

# ? Apr 24, 2015 07:21

Arglebargle III: Feb 21, 2006

For reference everybody 10,000 RMB is pocket change. Something like three months of a Chinaman's average salary i.e. nothing.

# ? Apr 24, 2015 07:40

I would blow Dane Cook: Dec 26, 2008

Not so glorious after all. :downsrim:

quote:

Glorious Property Seen Close to Default After Kaisa Tumble

After Kaisa Group Holdings Ltd. defaulted on its dollar bonds earlier this week, the market got to wondering, who could be next? They didn�t have to look very far.

Attention has rapidly shifted to Glorious Property Holdings Ltd., whose controlling shareholder is billionaire Zhang Zhirong. Moody�s Investors Service cut its senior unsecured rating to Ca, just one step from the lowest grade typically signaling default, on April 20 citing sliding sales. It settled $19.5 million of interest Friday on its $300 million of 13 percent notes due Oct. 25, which have dropped 6.3 cents this month to trade at 78.4 cents on the dollar.

Investors got a reminder of the risks of investing in Chinese companies� some $275 billion of dollar bonds outstanding when Kaisa missed a grace period to pay $52 million of overdue interest on two of its U.S. currency notes, making it the first developer from the nation to default on its dollar debt. China�s weakest economic growth since 1990 and a slumping real estate market are only adding to concerns.

�Glorious is currently the most likely to default among Chinese developers with dollar bonds outstanding,� said Rui Guo, a credit analyst at Mitsubishi UFJ Securities HK Ltd. �The series of overdue debt payments reflects the very weak cash flow and liquidity profile and heightened default risk of Glorious, which are worsened by the sharp losses incurred by the company.�
Delinquent Debts

Doris Chung, a public relations officer at Glorious, said by phone Friday that the semi-annual interest on the 2015 notes had been settled. There was no information at this stage about the principal repayment in October, she said.

Glorious, which according to its website focuses on developing large scale and high quality properties in cities in the Shanghai region, Yangtze River Delta and northeast China, had missed scheduled payments as of Dec. 31 on loans of 149.6 million yuan ($24 million) in principal and 46.4 million of interest, according to its annual results dated April 15.

Since the end of last year, the company also failed to meet repayment deadlines on 500 million yuan of principal and 397.3 million yuan interest on unspecified borrowings this year, it said, without giving further details. While the builder subsequently settled the bulk of the missed payments, it was still delinquent on 130.3 million yuan, it said.
Sales Plunge

Glorious�s contracted sales plunged 45 percent to 4 billion yuan in 2014 with revenue dropping 48 percent, it said. Cash and cash equivalents including restricted cash slid to about 1.4 billion yuan as of the end of 2014 from about 3 billion yuan at the end of 2013, according to the results.

�There are two major concerns with the company,� said Stephanie Lau, an analyst at Moody�s in Hong Kong. �One is its weakening sales execution and the other is its poor liquidity.�

Sales at Glorious have been declining in the past three years and gross profit turned negative for the first time last year since its initial public offering in 2009, Bloomberg-compiled data show.

�Compared to Kaisa, we don�t think Glorious�s current situation is much better off, since the company has been experiencing operation deterioration from 2012,� Kenny Wu, a credit analyst at Citigroup Inc., wrote in an April 21 report.

Glorious�s $400 million of 13.25 percent 2018 bonds have tumbled 17 cents since Dec. 31 to a three-month low of 56 cents on the dollar as of Thursday. Kaisa�s similar-maturity $800 million of 8.875 percent debentures are at 55.2 cents.
Bondholder Committee

Kaisa�s woes began last year after it issued a statement Oct. 17 denying rumors that its chairman, Kwok Ying Shing, was missing and unreachable. One week later, the government said the former Shenzhen security chief Jiang Zunyu was under investigation. Within two months, Kaisa announced Kwok�s resignation for �health reasons� effective at year-end.

People familiar with the matter said in January Kaisa was being investigated for links to Jiang, who had served as party chief of Longgang district, where some approval procedures for Kaisa developments had been suspended. Kwok returned as chairman last week, as it negotiates with investors on debt restructuring.

There are nine money managers in Kaisa�s offshore bondholder committee, people familiar with the matter said today. They are Ashmore Investment Management Pte, BFAM Partners Hong Kong Ltd., CQS (HK) Ltd., Citic Securities International Co., Claren Road Asset Management LLC, Harvest Global Investments Ltd., Highbridge Capital Management (HK) Ltd., Prudence Investment Management Ltd. and Value Partners Ltd., the people said, asking not to be identified because the details are private.
Rongsheng Heavy

Bert Grisel, a managing director in Hong Kong at Moelis & Co., which is advising the committee, declined to comment.

Glorious was founded in 1996 by Zhang Zhirong in Shanghai. Zhang stepped down as chairman of Glorious in November 2012 after a different company he controlled agreed to pay $14 million to resolve a U.S. insider-trading claim. Also at that time, he resigned as chairman of shipbuilder China Rongsheng Heavy Industries Group Holdings Ltd., which plans to start trading under its new name China Huarong Energy Company Ltd. from Friday. His departure was unrelated to that, his public relations firm said at the time.
Zhang Zhirong

Rongsheng announced on Tuesday that it has reached a consensus with government authorities and relevant parties to sell the core assets and liabilities of its onshore shipbuilding and offshore engineering businesses to an unidentified buyer. Its shares are up 43.2 percent since the announcement while Glorious�s stock has climbed 10.7 percent.

Zhang still holds a 63.9 percent stake in Glorious, according to data compiled by Bloomberg. His estimated net worth was $1.4 billion as of Friday, the data show.

Zhang came into the Shanghai office of the media group Jiemian on Jan. 15, it said on its microblog. Jiemian reported earlier that Zhang had left for the U.S. Zhang denied any connection to Ling Jihua, who�s a former top aide of retired president Hu Jintao and is being probed, or his brother who is also under investigation, contrary to the Jiemian article, according to a company statement.

Glorious differs from Kaisa in that Kaisa�s stumble �stemmed from the sales restrictions by the Shenzhen government whereas Glorious�s trouble was due to weak execution and lowered repayment capabilities,� said Chris Yip, director of corporate ratings at Standard & Poor�s. The credit assessor lowered its score on Glorious bonds in January to CCC-. S&P defines that as an issuer that will likely default without an unforeseen positive development, and that specific default scenarios are envisioned over the next 12 months.

The strains at Glorious come as China�s new property starts slid 18 percent in the first three months of the year. The nation�s cooling economic growth has left a backlog of unsold homes and depressed prices.

�Glorious management has come to a stage when they realized they may have to sell assets to make debt payments,� S&P�s Yip said. �But finding the right buyers in this market would be challenging.�

http://www.bloomberg.com/news/articles/2015-04-24/glorious-property-seen-as-close-to-default-after-kaisa-s-tumble

I would blow Dane Cook fucked around with this message at 13:41 on Apr 24, 2015

# ? Apr 24, 2015 13:39

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

VideoTapir posted:

I don't want to completely dissuade her. I mean I presume she has at least a sliver of financial education (she has a degree in port management of all things) , but it's clear she doesn't know what she's doing. This isn't something one should do unless you understand it.

Managing investments is something most people shouldn't do, including many people who do it.

That said, if it's a smallish amount of money let her do it for the experience or "un. Just don't consider it investing.

# ? Apr 24, 2015 14:51

Grand Fromage: Jan 30, 2006; L-l-look at you bar-bartender, a-a pa-pathetic creature of meat and bone, un-underestimating my l-l-liver's ability to metab-meTABolize t-toxins. How can you p-poison a perfect, immortal alcohOLIC?

caberham posted:

excess money

It's not 1960 anymore, nobody has this except the 1%ers.

# ? Apr 24, 2015 17:15

namaste friends: Sep 18, 2004; by Smythe

China has cut its over night again. This is the third time in 6 months.

http://mobile.reuters.com/article/idUSKBN0NV0A320150510?irpc=932

# ? May 10, 2015 18:55

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

It'll work this time I'm sure.

# ? May 10, 2015 19:43

caberham: Mar 18, 2009; by Smythe; Grimey Drawer

This time I won't give a poo poo about all the naysayers. Yeah the economy's going to tank but it's been a while and I can make some more good money while the market is rolling. This will create another short rally in the stock market before a major correction.

# ? May 10, 2015 19:53

I would blow Dane Cook: Dec 26, 2008

quote:

China�s technology stock mania scaled new heights on Monday when shares in a Shanghai-listed real estate company rose by the maximum 10 per cent daily limit after it changed its name to P2P Financial Information Service Co.

The company, formerly known as Shanghai Duolun Industry, acknowledged in filings that it had not started developing a peer-to-peer lending business.

But the company estimated that an Internet domain it recently registered, https://www.p2p.com was worth $100m.

The website currently features a few photos and a Chinese caption stating �This domain is worth $100m.�

http://www.ft.com/intl/cms/s/0/cf088f60-f7d2-11e4-9beb-00144feab7de.html

I would blow Dane Cook fucked around with this message at 00:58 on May 19, 2015

# ? May 19, 2015 00:55

Nonsense: Jan 26, 2007

Sell all of your earthly goods and escape the coasts.

# ? May 19, 2015 01:42

AtomikKrab: Jul 17, 2010; Keep on GOP rolling rolling rolling rolling.

Jumpingmanjim posted:

http://www.ft.com/intl/cms/s/0/cf088f60-f7d2-11e4-9beb-00144feab7de.html

poo poo is entirely hosed isn't it?

# ? May 19, 2015 03:52

namaste friends: Sep 18, 2004; by Smythe

People say that China isn't hosed because the politburo is awash in US dollar reserves to the tune of 3 trillion. There's a long way to go before China gets in any kind of trouble, whether it be a crashing housing market or a crashing stock market.

# ? May 19, 2015 04:13

Nonsense: Jan 26, 2007

Cultural Imperial posted:

People say that China isn't hosed because the politburo is awash in US dollar reserves to the tune of 3 trillion. There's a long way to go before China gets in any kind of trouble, whether it be a crashing housing market or a crashing stock market.

No the PRC doesn't get to magic away its problems like the United States, ya'll are hosed.

# ? May 19, 2015 19:43

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

Basically every article I read saying that it's not THAT big a deal guys is assuming that China being an authoritarian country is a literal panacea to any economic problems.

# ? May 19, 2015 19:53

A3th3r: Jul 27, 2013; success is a dream & achievements are the cream

Cultural Imperial posted:

People say that China isn't hosed because the politburo is awash in US dollar reserves to the tune of 3 trillion. There's a long way to go before China gets in any kind of trouble, whether it be a crashing housing market or a crashing stock market.

I see China as being a pastiche of themes from Great Depression-era Michigan. There are a lot of similarities there.

# ? May 19, 2015 20:04

Warcabbit: Apr 26, 2008; Wedge Regret

Heard something on Bloomberg this morning about 'watch out for this weekend' in China. Any ideas what it might refer to?

# ? May 19, 2015 20:30

caberham: Mar 18, 2009; by Smythe; Grimey Drawer

Make your money before the market implodes, you guys are just losing out :smug:

# ? May 19, 2015 21:34

Ardennes: May 12, 2002

China's currency reserves is going to continue to cushion the government, the bigger issue is going to be the chaos a crash will cause in the economy especially if it wipes out the savings of a chunk of the population. Right now China is desperately trying to build up domestic consumption, and this would set them back considerably.

# ? May 19, 2015 22:10

Raenir Salazar: Nov 5, 2010; College Slice

Fojar38 posted:

Basically every article I read saying that it's not THAT big a deal guys is assuming that China being an authoritarian country is a literal panacea to any economic problems.

Obviously not a panacea but on the other hand one that enables them to make decisions based on maintaining power at all costs; such as enforcing regulations on the 1% via firing squad if need be I think is the popular conception of Chinese politics vis-a-vis US paralysis regarding the same.

# ? May 19, 2015 23:55

Arglebargle III: Feb 21, 2006

caberham posted:

Make your money before the market implodes, you guys are just losing out

China Economy Megathread: Accurately predicting last week's stock moves since 2014.

# ? May 20, 2015 00:58

Drakhoran: Oct 21, 2012

Apparently China is now going to construct a transcontinental railroad through the Amazon. Forgive me for being dumb here but, why?

# ? May 20, 2015 14:27

Raenir Salazar: Nov 5, 2010; College Slice

Drakhoran posted:

Apparently China is now going to construct a transcontinental railroad through the Amazon. Forgive me for being dumb here but, why?

Because they're running out of things to spend money on at home. In Victoria II terms they're boosting their industry score by investing in other countries.

# ? May 20, 2015 14:34

computer parts: Nov 18, 2010; PLEASE CLAP

Drakhoran posted:

Apparently China is now going to construct a transcontinental railroad through the Amazon. Forgive me for being dumb here but, why?

There's currently a bottleneck for products coming from Asia; several of them have to go around South america. This is part of a trend for increasing access to the Atlantic/Europe.

# ? May 20, 2015 14:38

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# ? May 12, 2024 19:41

RocknRollaAyatollah: Nov 26, 2008; Lipstick Apathy

Drakhoran posted:

Apparently China is now going to construct a transcontinental railroad through the Amazon. Forgive me for being dumb here but, why?

It's a prestige program and it would all be done with labor from China. It, as well as the several other programs, probably won't happen.

# ? May 20, 2015 14:41

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