Morbus posted:

I, for one, open the China Economy Megathrad to read 10 paragraphs about dutch coins from the 17th century or whatever the gently caress horseshit that was.

Vladimir Putin posted:

Britain attacked China over the right to sell narcotics to China that were at the time outlawed in Britain. China lost the war and then lost 100 years. The end.

quote:

China's wobbles not good news, Chinese in Australia say

Experts say slowing growth and greater regulation in China, which they view as temporary, will curb the flow of capital into Australia and the demand for property assets.

China announced its gross domestic product growth dropped to 6.9 per cent last Tuesday and Chinese banks started blocking foreign exchange transactions after the government told executives to toughen up capital controls. This comes after its sharemarkets tumbled heavily in the first week of 2016.

"The Chinese government's revision of 6.9 per cent is strategic but only to show they are still in control," Chinese high net worth club ACEC president Richard Yuan said.

Sydney Chinese prestige property agent Michael Zhu said things in China were worse than he thought.



"Whatever it is, things won't be good for China in the next two years. China's conditions are worse than I thought. Many in China are bracing themselves for company collapses and loss of jobs. The stockmarkets have fallen badly and it is inevitable some companies will be in trouble."

Conditions in China, a block on money transfers and Beijing's decision to consolidate the country's state-owned sector, which could result in job losses and a change in business direction, have led to businesses taking a "wait and see" approach.

While the desire to buy was strong, many Chinese investors would not start a transaction because they were unsure it they could close it, Mr Yuan said.

The volume of transactions completed during Chinese New Year holidays, which start in February, would be an indicator of how "bad things are", Mr Zhu added.

The long Chinese New Year holidays is a time when many Chinese are holidaying overseas and "shopping".

"The campaign to crack down on the flow of 'hot money' is not going away," KPMG Asia Business Group leader Doug Ferguson said.

"There could be a short-term problem, especially with the purchase of apartments. Still, we have to bear in mind China has a large number of buyers that could sustain demand despite the tightening."

'NOT EASY TO DO BUSINESS'

Mr Ferguson's optimistic outlook is shared by an equal number of Chinese businesses who are sanguine about China's slowdown, saying a slowdown in investment would be "temporary" as Chinese investors adjust to "new ways of doing business".

The move to stop the flow of "underground" money is the main reason for Beijing's tightening of capital transfers but it is not aimed at stopping legitimate investors from investing outside China, property specialist CBRE head of Asian services NSW Danny Shi said.

"Many businesses find it hard to make a good margin, because they're working in a different kind of market now," Mr Shi said.

"Regulations are increasing. It's not easy to do business there now. President Xi [Jinping] is tracking corruption but the general public views that as good leadership."

"Stopping outflows of capital is not my understanding of the primary intention," KPMG China practice director Tim Lu said.

"In 2015 we saw massive continuing outbound direct investment into Australia by private-sector investors in new sectors such as healthcare, food and agriculture, real estate and infrastructure – all approved by Chinese foreign exchange regulators."

Many agree China's structural changes and desire to release "clean" capital globally means one thing: more investments in Australia, not less.

"Due to the low margins in China because of regulatory restrictions, many will go overseas to trade," CBRE's Mr Shi added.

Knight Frank head of Asian markets Dominic Ong confirmed he had received fresh Chinese interest in Australian property, particularly in prime commercial property and large development sites.

Further, China's healthy consumer economy, fuelled by its middle-class wealth, was replacing its dependence on investments and creating a "new economy", experts agreed.

"The services and consumer products sector is growing steadily above 8 per cent along the east coast and central China . . . the critical driver for future growth for not only China but the region's economy," KPMG China practice leader Helen Zhi Dent said.

SLOWDOWN AT CASINO TABLES

Think Global China trend expert David Thomas said: "The main point to make about China is this tricky rebalancing from heavy industry to domestic consumption and services. You could argue that it's amazing that despite this major transition, China's economy is still growing at 6 to 7 per cent.

"There's no sign of a slowing on the ground, except perhaps on the casino tables."

The slowdown in Macau casinos is a result of the crackdown of corruption.

"China is working through some tough structural changes. We have seen some temporary delay in major investment decisions which could have contributed to the slowdown," investment advisory firm Jing Meridian director Jingmin Qian said.

"The structural change is good for China. The consumer demand is strong and will become a bigger driver of the growth. So it's too early to make a negative judgment of China's economy. The world outside China is learning about them as they are learning about the process themselves.

"The world's second-largest economy growing at 6.9 per cent is still very good. They have done what no other country has ever done before."

quote:

China GDP scepticism upends trading strategies By: Published on: Tuesday, January 19, 2016 Distrust in official data coincides with hedge-fund closures, including Nevsky Capital.

China’s 6.9% official growth rate released on Tuesday – the lowest rate of annual expansion since 1990 – was, among other things, once again met with scepticism. Market participants claim Beijing routinely fudges the numbers to fulfil political objectives.

Perhaps it wouldn’t matter so much if distrust equated only to a minor and predictable inflation of numbers, but in January Fathom Consulting estimated China’s GDP growth at 2.4%.

This divergence between official and private-sector estimates has market consequences.

Nevsky Capital’s decision to stop managing its $1.5 billion hedge fund in December was notable, but not entirely out of the blue: in the past six months alone, the hedge fund industry has also lost Liongate Capital and a key Fortress Investment Group fund, with BlueCrest Capital saying it will return outside investors’ money.

Almost 700 hedge funds worldwide were liquidated in the first nine months of 2015 alone, according to Hedge Fund Research.

However, Nevsky might be the first to say out loud that China, in large part, has made the whole business model unmanageable.

Nevsky wrote a letter to clients explaining itself, beginning with a recap of the investment process it has used throughout the fund’s 15-year life: top-down forecasting of macroeconomic variables combined with bottom-up forecasts of company earnings.

It is a process that has required, among other things, transparent "and truthfully compiled" data at a macro and company level, and logical decision-making by policymakers.

'Biggest culprit'
The problem is, Nevsky no longer thinks it can count on that, and China, it says, is the biggest culprit.

Nevsky says data releases have become less transparent and truthful, and that as China and India have grown in importance, the problem has been exacerbated. Nevsky doesn’t believe either country’s stated real GDP growth.

"This obfuscation and distortion of data … makes it increasingly difficult to forecast macro and hence micro as well," it states.

Companies are disclosing less than ever, and the transparency of decision-making has declined, Nevsky says, again naming China as a key culprit, with a twist of Yeltsin-era Kremlinology.

"It is now the norm, not the exception, for most countries in the emerging world," it states. "We are not convinced that knowingly continuing to bang our heads against these newly erected brick walls would be a sensible decision."

Does all of this stand up? One school of thought has it that Nevsky is simply picking a good time to throw in the towel and blaming a changing world for doing so; certainly, when the letter goes on to moan about Asian time zones, there’s a sense of it looking for reasons to get out.

At the same time that Nevsky is making its excuses, others are finding opportunity in more focused ways: Stockholm-based East Capital last month announced a China fund with a thematic environmental strategy, requiring a Swedish CIO to spot clean-tech opportunities in one of the world’s biggest polluters.

So not everyone thinks China’s a problem rather than a prospect.

Nevertheless, there is an important point in Nevsky’s complaint. In an era when falls in China’s domestic – and largely restricted – A-share market can prompt falls of several percentage points in stock markets worldwide, the country is increasingly relevant to fund managers everywhere, even if they don’t invest in China themselves.

And, following on from that, if nobody trusts the data coming out of this vastly influential market, what does that mean for people whose investment decisions are anchored on reliable data?

Attempting to predict market movements in speculator-driven Shanghai or Shenzhen is a fool’s game at the best of times and has historically been shrugged off by the rest of the world.

However, if it’s going to translate so readily into global shocks, as the start of the year suggests, then an awful lot of fund strategies are, like Nevsky’s, going to become steadily harder to implement with confidence.

Cultural Imperial posted:

http://www.euromoney.com/Article/3521958/China-GDP-scepticism-upends-trading-strategies.html

Krispy Kareem posted:

So we add 3 trillion and nothing bad happens, because unemployment was high and people thought the economy was worse than it was. Plus no one's gotten raises for the last decade so increased wages weren't putting pressure on prices.

Krispy Kareem posted:

There was a statistic from the Economist that it'd only take 5% of Chinese to convert their Yuan to the max of $50k in Dollars to completely exhaust China's currency reserves.

I have no idea if 5% of Chinese have or feel a need to exchange their Yuan for $50k in Dollars. But it'd be kind of funny if it becomes easier to turn Butcoins into USD than Yuan.

Jumpingmanjim posted:

So the head of the national bureau of statistics was arrested for corruption, maybe those GDP numbers were not high enough.

Jumpingmanjim posted:

Here's a dumb question? How do we know for sure the size of China's foreign currency reserves?

Vladimir Putin posted:

No one knows for sure, it's all an estimate.

Krispy Kareem posted:

What kind of market crash would the U.S. see if the head of the BEA was arrested shortly after releasing highly suspect GDP information?

GoutPatrol posted:

Ah yes, 5% of the country has 50,000 USD in liquid assets and can all start a bank run no problem.

Ccs posted:

The World Economic Forum had a talk about China where one of the main speakers said that China is shifting from quantity of economic growth to quality of growth.
http://www.weforum.org/events/world-economic-forum-annual-meeting-2016/sessions/where-is-the-chinese-economy-heading

I have no idea what that actually means.

And he still believes the numbers aren't made up:

"“I do not believe there is volatility in the Chinese economy,” says Jiang Jianqing, Chairman of the Board, Industrial and Commercial Bank of China, because growth in 2015 was, as predicted, still 6.9%."

Ccs posted:

The World Economic Forum had a talk about China where one of the main speakers said that China is shifting from quantity of economic growth to quality of growth.
http://www.weforum.org/events/world-economic-forum-annual-meeting-2016/sessions/where-is-the-chinese-economy-heading

I have no idea what that actually means.

And he still believes the numbers aren't made up:

"“I do not believe there is volatility in the Chinese economy,” says Jiang Jianqing, Chairman of the Board, Industrial and Commercial Bank of China, because growth in 2015 was, as predicted, still 6.9%."

Jumpingmanjim posted:

Jumpingmanjim posted:

SHCOMP making GBS threads itself again.

Jumpingmanjim posted:

SHCOMP making GBS threads itself again.

Jumpingmanjim posted:

gently caress You And Diebold posted:

So wait, they are trying to say they rose 64.5% in one month?

Fojar38 posted:

Honestly the fact that the Chinese announce their yearly growth rate the first week of January should have been raising red flags for years.

Fojar38 posted:

Honestly the fact that the Chinese announce their yearly growth rate the first week of January should have been raising red flags for years.

Fojar38 posted:

Honestly the fact that the Chinese announce their yearly growth rate the first week of January should have been raising red flags for years.

Sound posted:

are the restrictions on selling stocks and moving cash still in place? What's going to happen when those are lifted?

Sound posted:

are the restrictions on selling stocks and moving cash still in place? What's going to happen when those are lifted?