China Economy Megathread

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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
---------------------------->

Shadoer posted:

Fortunately any investor that isn't insane has likely been able to get their money out without too much loses, courtesy of those pensioners. Now those lazy greedy pensioners and that big fat government will be holding the bag and those job creators will be scott free.

This is China though so the big fat government actually is to blame in this case.

# ? Aug 26, 2015 08:49

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# ? May 11, 2024 19:48

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
---------------------------->

quote:

Washington � CHINA, many believe, is in a financial and economic meltdown causing anxiety and panic everywhere. China�s stock market dive first dragged down other emerging markets and has now spread to the United States, slicing trillions of dollars off the value of stocks traded here and in other global markets. Since China is the world�s second largest economy and has growing financial ties around the world, developments there clearly have enormous potential implications for both developed and emerging markets.

But the popular narrative is not well supported by the facts. There is little evidence that China�s economy is slowing significantly from the 7 percent pace reported by the government for the first part of the year. Wage growth is running at about 10 percent annually; the pace of creation of nonagricultural jobs is stronger than in any recent year; both real disposable income and consumption expenditures of Chinese households are growing strongly. It is not the picture of an economy heading for a hard landing.

Services, not industry, are driving China�s growth, as has been the case for three full years. This is likely to continue since per capita incomes in China are reaching a level where a growing share of spending is on entertainment, travel and other services rather than on goods.

Naysayers question government economic data, continuing to focus on weakness in China�s industrial sector and the extremely slow growth of electric power output. But steel production, for example, is significantly more energy intensive than entertainment, so the demand for electricity has fallen sharply as the structure of the economy has evolved.

Assuming that electric power growth is a good proxy for China�s overall economic expansion is like trying to drive a car by looking in the rearview mirror.

Some economists watching from abroad believe that the country is in the midst of a financial crisis because of the excessive debt burden it incurred in recent years. But that view is even less well supported. After a very modest two-day depreciation earlier this month, the exchange rate of the renminbi has changed little against the dollar for eight consecutive trading days; capital outflows continue at a moderate, very sustainable pace; bank liquidity remains strong. This does not yet look remotely like a financial crisis.

Rather than a financial and economic meltdown, China is experiencing an overdue correction in its equity market. And the connection between China�s equity market and China�s real economy has always been tenuous.

By my tallies, from June 2014 to June 2015, prices increased more than 150 percent on the Shanghai exchange, and even more on the Shenzhen Stock Exchange and the Shenzhen ChiNext board, a Nasdaq-style marketplace. An unusually large part of this run-up was fueled by retail investors who borrowed to buy equities. The market was priced way beyond perfection. Once prices fell even slightly, many of these investors found themselves needing to sell, leading to a sharp market correction.

At first, the government unwisely intervened to stem the rout for a time, but the sharp sell-off continued earlier this week. There is likely to be more of the same to come. Even at Tuesday�s much lower prices, the Shenzhen market was trading at a still-lofty 39 times earnings.

While not as overpriced, American equities before last week had experienced a six-year bull market without a correction. The catalyst for this month�s correction was the view that China�s growth was weaker than advertised and likely to soften further and that the currency depreciation that began earlier this month was China�s last gasp at propping up economic growth. The perception that China�s growth was slowing drove commodity prices to new lows, further weakening emerging markets such as Brazil and Chile that are big commodity exporters, and eventually driving down American equities sharply. But if China hadn�t been the catalyst for the correction in American markets, it most likely would have been something else.

Despite what many think, not all debt is the same, nor are all equity market slides. There have been many more corrections in both the United States and China than there have been financial crises. Allowing those corrections to take place is part of letting markets determine outcomes, which is a good thing.

And that is what the government of China is now doing, both with respect to the exchange rate and belatedly in more recent days, to a surprising extent, with the equity markets. There remain concerns over Chinese real estate and state-owned enterprises. But recent events should be seen as part of the conscious liberalization and rebalancing of the Chinese economy. Even if that means a sell-off in stocks, it is not a sell-off in the fundamentals of the Chinese economy. In fact, this may strengthen those fundamentals by going further down the path to reform.

# ? Aug 26, 2015 08:59

Shadoer: Aug 31, 2011; Zoe Quinn is one of many women targeted by the Gamergate harassment campaign.

Support a feminist today!

^^^^^^^^^^^^^^^^^^^^

quote:

But the popular narrative is not well supported by the facts. There is little evidence that China�s economy is slowing significantly from the 7 percent pace reported by the government for the first part of the year. Wage growth is running at about 10 percent annually; the pace of creation of nonagricultural jobs is stronger than in any recent year; both real disposable income and consumption expenditures of Chinese households are growing strongly. It is not the picture of an economy heading for a hard landing.

So which news organization is posting this piece of delusion?

# ? Aug 26, 2015 09:04

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
---------------------------->

Shadoer posted:

^^^^^^^^^^^^^^^^^^^^

So which news organization is posting this piece of delusion?

The loving New York Times lol

http://www.nytimes.com/2015/08/26/opinion/false-alarm-on-a-crisis-in-china.html

# ? Aug 26, 2015 09:06

Zohar: Jul 14, 2013; Good kitty

I've read some stuff about Xi possibly preparing to throw Li Keqiang under the bus as a fall guy, and given Li's role in it I would imagine that might end the process of economic liberalisation for the foreseeable future, at least on a macro level.

Fojar38 posted:

The loving New York Times lol

http://www.nytimes.com/2015/08/26/opinion/false-alarm-on-a-crisis-in-china.html

Nicholas Lardy has a banal and Panglossian understanding of the Chinese economy so I'm not surprised he'd write this, though I'm more surprised the NYT would carry it so prominently -- looking at the front page it does seem they've prioritised some more sensible views at least.

# ? Aug 26, 2015 09:15

Shadoer: Aug 31, 2011; Zoe Quinn is one of many women targeted by the Gamergate harassment campaign.

Support a feminist today!

Fojar38 posted:

The loving New York Times lol

http://www.nytimes.com/2015/08/26/opinion/false-alarm-on-a-crisis-in-china.html

And cancelling my subscription...

Been considering doing it for a while as the nytimes quality has been sliding over the last while, but this takes the cake.

# ? Aug 26, 2015 09:19

Zohar: Jul 14, 2013; Good kitty

Shadoer posted:

And cancelling my subscription...

Been considering doing it for a while as the nytimes quality has been sliding over the last while, but this takes the cake.

In their defence it's the op-ed section and there's better stuff about China on the front page right now. Not that I'm hugely enthused about the NYT in general.

# ? Aug 26, 2015 09:21

Arglebargle III: Feb 21, 2006

Wow got up this morning and there was a rally and now it's in the negatives? Somebody just made money and someone else took a bath.

# ? Aug 26, 2015 11:42

tbp: Mar 1, 2008; DU WIRST NIEMALS ALLEINE MARSCHIEREN

etalian posted:

The law got changed to allow Chinese pensions to invest in risky local investments like derivatives or A class stocks.

Government is hoping a flood of pension money will help revive the market.

"Derivatives" they're not buying loving rates swaps with this money lol

# ? Aug 26, 2015 12:46

tbp: Mar 1, 2008; DU WIRST NIEMALS ALLEINE MARSCHIEREN

the Chinese markets are, more than any western market, ruled by sentiment. The "disconnect" btwn them and the real economy is t something the nyt just made up, but I can't verify the economic statistics quoted in that article

# ? Aug 26, 2015 12:52

Murgos: Oct 21, 2010

Zohar posted:

In their defence it's the op-ed section and there's better stuff about China on the front page right now. Not that I'm hugely enthused about the NYT in general.

Isn't that what the Op-Ed section is for? Providing counter arguments to the mainline narrative?

Eh, if that piece really sways someone they'll get what they deserve as 5 minutes of critical thought and google disproves almost every point in there.

# ? Aug 26, 2015 12:57

Shifty Pony: Dec 28, 2004; Up ta somethin'

Let the investigations begin!

I wonder if it will be a real investigation into potential illegal activities and corruption...

quote:

HONG KONG � The authorities in China have opened two investigations into the country�s biggest brokerage firms amid market turmoil.

The police are investigating eight executives from Citic Securities, China�s biggest brokerage firm, on suspicion of illegal securities trading, Xinhua, the official news agency, reported late Tuesday.

In addition, staff members from the main stock market regulator, China Securities Regulatory Commission, and a reporter were been taken into custody, Xinhua said.

The reporter, from the respected news outlet Caijing, was identified by Caijing as Wang Xiaolu and wrote an article last month that said the government was considering withdrawing its support for the stock market. The report prompted a denial from the securities regulator, but was later seen as contributing to a huge plunge in Chinese stocks in late July.

or not so much.

# ? Aug 26, 2015 13:29

Daduzi: Nov 22, 2005; You can't hide from the Grim Reaper. Especially when he's got a gun.

tbp posted:

the Chinese markets are, more than any western market, ruled by sentiment. The "disconnect" btwn them and the real economy is t something the nyt just made up, but I can't verify the economic statistics quoted in that article

Nobody can because they come from the government and are most probably bogus. Really if you want to get an actual feel for the Chinese economy you need to rely on one or both of the following:

1) The Li Keqiang Index
2) First hand accounts from those who are actually involved in private investment or industry

Neither of those are good right now, and haven't been for a while.

# ? Aug 26, 2015 15:35

Zarin: Nov 11, 2008; I SEE YOU

So what did the market close at yesterday?

And/or what time US does it close? I think I've been seeing that it opens around 8:30pm CST.

Sorry for the newb questions, I've only started looking at this thread since the Tianjin explosion, and was all :stare:

when it went from ~2 posts a day to 200.

# ? Aug 26, 2015 15:35

-Zydeco-: Nov 12, 2007

Zarin posted:

So what did the market close at yesterday?

And/or what time US does it close? I think I've been seeing that it opens around 8:30pm CST.

Sorry for the newb questions, I've only started looking at this thread since the Tianjin explosion, and was all when it went from ~2 posts a day to 200.

2,927.29 (-1.27%)

E: It's 12h off from EST so it closes at 3am EST or 2am CST.

-Zydeco- fucked around with this message at 15:48 on Aug 26, 2015

# ? Aug 26, 2015 15:43

Murgos: Oct 21, 2010

Shifty Pony posted:

Let the investigations begin!

I wonder if it will be a real investigation into potential illegal activities and corruption...

or not so much.

So, the Chinese model is arrest a bunch of people that the uneducated can easily attribute blame too even though it's obvious that poor government policy led to the event and any individuals behavior is just a scapegoat.

While the western model is to arrest no one because the people who knowingly created fraudulent AAA product ratings (and sold them as such knowing they were junk) via rules trickery didn't actually break any laws even though the people responsible are easily identified and known to the public and their actions are completely documented.

Not sure if I had to choose which one of those I would prefer (neither).

# ? Aug 26, 2015 16:03

A Bad King: Jul 17, 2009; Suppose the oil man,
He comes to town.
And you don't lay money down.

Yet Mr. King,
He killed the thread
The other day.
Well I wonder.
Who's gonna go to Hell?

Murgos posted:

So, the Chinese model is arrest a bunch of people that the uneducated can easily attribute blame too even though it's obvious that poor government policy led to the event and any individuals behavior is just a scapegoat.

While the western model is to arrest no one because the people who knowingly created fraudulent AAA product ratings (and sold them as such knowing they were junk) via rules trickery didn't actually break any laws even though the people responsible are easily identified and known to the public and their actions are completely documented.

Not sure if I had to choose which one of those I would prefer (neither).

We did threaten the lives of common securities traders through the anonymity of the internet. That counts for mob justice?

# ? Aug 26, 2015 16:23

Krispy Wafer: Jul 26, 2002; I shouted out "Free the exposed 67"
But they stood on my hair and told me I was fat; Grimey Drawer

Murgos posted:

So, the Chinese model is arrest a bunch of people that the uneducated can easily attribute blame too even though it's obvious that poor government policy led to the event and any individuals behavior is just a scapegoat.

While the western model is to arrest no one because the people who knowingly created fraudulent AAA product ratings (and sold them as such knowing they were junk) via rules trickery didn't actually break any laws even though the people responsible are easily identified and known to the public and their actions are completely documented.

Not sure if I had to choose which one of those I would prefer (neither).

The sad part is, you can do very illegal things like launder money for drug cartels and still not get charged for a crime. So it's not just people successfully walking that fine line between illegal and legal. You can literally assist in laundering money for murderous drug kingpins and all you get is a fine.

Heck, it wasn't even an American bank so there were no political downsides to prosecuting the gently caress out of that bank. We just apparently really like bankers and hate to see them inconvenienced.

# ? Aug 26, 2015 16:34

Radbot: Aug 12, 2009; Can't post for 3 years!

Was there ever a reason given why we didn't prosecute HSBC for that?

# ? Aug 26, 2015 16:45

OwlBot 2000: Jun 1, 2009

Radbot posted:

Was there ever a reason given why we didn't prosecute HSBC for that?

Capitalism.

quote:

US authorities defended their decision not to prosecute HSBC for accepting the tainted money of rogue states and drug lords on Tuesday, insisting that a $1.9bn fine for a litany of offences was preferable to the 'collateral consequences' of taking the bank to court.
....
"Had the US authorities decided to press criminal charges, HSBC would almost certainly have lost its banking licence in the US, the future of the institution would have been under threat and the entire banking system would have been destabilised."

OwlBot 2000 fucked around with this message at 17:00 on Aug 26, 2015

# ? Aug 26, 2015 16:53

Gunshow Poophole: Sep 14, 2008; OMBUDSMAN
POSTERS LOCAL 42069; Clapping Larry

Radbot posted:

Was there ever a reason given why we didn't prosecute HSBC for that?

basically the official reasoning was "Too big to fail" v 2.0 except this time with actual criminal activity.

Ah beaten ^

# ? Aug 26, 2015 16:56

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Reasons which apply to any non-local bank.

# ? Aug 26, 2015 16:56

Shifty Pony: Dec 28, 2004; Up ta somethin'

Murgos posted:

So, the Chinese model is arrest a bunch of people that the uneducated can easily attribute blame too even though it's obvious that poor government policy led to the event and any individuals behavior is just a scapegoat.

While the western model is to arrest no one because the people who knowingly created fraudulent AAA product ratings (and sold them as such knowing they were junk) via rules trickery didn't actually break any laws even though the people responsible are easily identified and known to the public and their actions are completely documented.

Not sure if I had to choose which one of those I would prefer (neither).

If I had to chose between the two I'd much rather policy failures be publicly aired so that there is a chance they can get fixed vs nailing individuals who were only enriching themselves via exploiting that policy. But of course it is a false dilemma and we should do both.

I'm kind of expecting that the investigation will turn up a foreign investor or two doing something shady (with that much money flowing around how could there not be some?) and that will be the scapegoat to continue the narrative that this is all the fault of anyone in China.

Edit: bonus if they catch one of their wanted ex-pats doing it.

Shifty Pony fucked around with this message at 17:07 on Aug 26, 2015

# ? Aug 26, 2015 17:02

Krispy Wafer: Jul 26, 2002; I shouted out "Free the exposed 67"
But they stood on my hair and told me I was fat; Grimey Drawer

There are probably British goons in this thread, did the HSBC mess make a lot of news over there? I imagine the Queen's banking regulators were pressuring the U.S. against prosecuting if the ramifications were really that big. Not that they had to push too hard, since we really like bankers in the United States.

As for China, it's just a question whether they'll execute the scapegoats in Beijing or send mobile execution vans to their hometowns.

# ? Aug 26, 2015 17:15

Fishvilla: Apr 11, 2011; THE SHAGMISTRESS

Krispy Kareem posted:

The sad part is, you can do very illegal things like launder money for drug cartels and still not get charged for a crime. So it's not just people successfully walking that fine line between illegal and legal. You can literally assist in laundering money for murderous drug kingpins and all you get is a fine.

Heck, it wasn't even an American bank so there were no political downsides to prosecuting the gently caress out of that bank. We just apparently really like bankers and hate to see them inconvenienced.

http://www.bloomberg.com/news/articles/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal

The old Red, White, & Blue based banks weren't clean on this front, either.

To be honest, the corruption runs so insanely deep in many of these places that I can't imagine a lonely teller or branch manager blowing the whistle on this without fear for their future safety. It's really the corporate office's responsibility to be putting auditing in place so that these can be caught with minimal retaliation to the low level drones.

# ? Aug 26, 2015 18:01

Ratoslov: Feb 15, 2012; Now prepare yourselves! You're the guests of honor at the Greatest Kung Fu Cannibal BBQ Ever!

-Zydeco- posted:

2,927.29 (-1.27%)

That's crazy volatile. It went as low as -4% and as high as +3% in one day of trading. That instability can't be good for the Chinese economy, even if they didn't have another day of free-falling stock prices.

# ? Aug 26, 2015 18:48

ThingOne: Jul 30, 2011; Would you like some tofu?

http://english.sse.com.cn/ In a move straight out of the Fox News playbook the Shanghai Stock Exchange's site has reversed the colors of it's stock arrows. Look at all that green :downs:

# ? Aug 26, 2015 19:45

Sheng-Ji Yang: Mar 5, 2014

ThingOne posted:

http://english.sse.com.cn/ In a move straight out of the Fox News playbook the Shanghai Stock Exchange's site has reversed the colors of it's stock arrows. Look at all that green .

its always been like that, as red is a good color in china

# ? Aug 26, 2015 19:49

drilldo squirt: Aug 18, 2006; a beautiful, soft meat sack; Clapping Larry

Why is green bad? Trees are green, as are other plants.

# ? Aug 26, 2015 19:59

OXBALLS DOT COM: Sep 11, 2005; by FactsAreUseless; Young Orc

drilldo squirt posted:

Why is green bad? Trees are green, as are other plants.

Exactly. Disgusting peasant poo poo, not like beautiful concrete and red lacquer.

# ? Aug 26, 2015 20:00

drilldo squirt: Aug 18, 2006; a beautiful, soft meat sack; Clapping Larry

Mange Mite posted:

Exactly. Disgusting peasant poo poo, not like beautiful concrete and red lacquer.

Those loving Chinese devils.

# ? Aug 26, 2015 20:02

icantfindaname: Jul 1, 2008

Mange Mite posted:

Exactly. Disgusting peasant poo poo, not like beautiful concrete and red lacquer.

And gold

I imagine literally everything in China is either grey, red or gold

# ? Aug 26, 2015 20:15

computer parts: Nov 18, 2010; PLEASE CLAP

icantfindaname posted:

And gold

I imagine literally everything in China is either grey, red or gold

Pretty close from my experiences there.

# ? Aug 26, 2015 20:16

ThingOne: Jul 30, 2011; Would you like some tofu?

Sheng-ji Yang posted:

its always been like that, as red is a good color in china

Well now I feel silly :blush:

# ? Aug 26, 2015 20:19

Poil: Mar 17, 2007

It's kinda weird to see that people are following the Chinese stock market and posting the fall as it happens. :suspense:

OwlBot 2000 posted:

Capitalism.

"We can't do anything because we've given them our balls to hold in an iron grip, lol."

# ? Aug 26, 2015 21:06

throw to first DAMN IT: Apr 10, 2007; This whole thread has been raging at the people who don't want Saracen invasion to their homes

Perhaps you too should be more accepting of their cultures

Poil posted:

It's kinda weird to see that people are following the Chinese stock market and posting the fall as it happens.

"We can't do anything because we've given them our balls to hold in an iron grip, lol."

Will be interesting to see if shoveling the pension funds into furnace was enough to stabilize the market or if it's going to start dropping off tomorrow again.

# ? Aug 26, 2015 21:45

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

Puistokemisti posted:

Will be interesting to see if shoveling the pension funds into furnace was enough to stabilize the market or if it's going to start dropping off tomorrow again.

Look, those pension funds are overfunded anyways. The party dictates that those funds do not include realistic mortality rates, as glorious PRC cannot have environmental pollution resulting in increasing rates of mortality!

What are the funds gonna do, admit that the party's environmental policy is absolute poo poo, lower their retirement ages, or provide a bailout to China's investor class?

# ? Aug 26, 2015 21:53

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's a little weird that there's so much :capitalism:

going on in this thread as if the problem here is that Beijing isn't intervening enough.

# ? Aug 26, 2015 21:54

Arglebargle III: Feb 21, 2006

Nah man it's more that the systematic injustice of state capitalism is so familiar as to be banal even on a massive scale.

# ? Aug 26, 2015 22:57

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# ? May 11, 2024 19:48

OwlBot 2000: Jun 1, 2009

Fojar38 posted:

It's a little weird that there's so much going on in this thread as if the problem here is that Beijing isn't intervening enough.

Capitalism has nothing to do with "intervention" or lack thereof.

# ? Aug 26, 2015 22:59

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