According to a research report released by Citibank, the biggest change to take place in the first half of 21st century is the rise of Asia (ex Japan) and the fall of US and Europe in terms of GDP composition. According to the estimate done by Citibank’s economists, the weight of Emerging Asia countries’s GDP (added together) Read the rest of this entry »
Archive for category Investing China (投资视角)
Investment bankers used to be the focal point of jealousy in China, probably same as in any other part of the world. Starting from 2012, however, the wind seems to have changed course. As illustrated from the above table, China (A Share market)’s IPO volume peaked in 2010, when the stock exchange floated companies worth more than 450 billion yuan. Since then, however, the regulator has tightened the tap and it was getting more and more difficult to get floated in the domestic A share market Read the rest of this entry »
Is China’s equity cheap? A lot of people tend to ask this question. Of course this is not that an easy question to answer, as “cheap” is a highly relative and subjective concept, and has so many different interpretations from various perspectives. Here I compare some of the commonly used valuation (12 months forward PE, trailing PB and return on equity) across different regions (as of May 2013). Read the rest of this entry »
It seems that China is in the process of engineering a soft landing scenario successfully. The Industrial production in April 2013 posted a reasonable growth of 9.3%, while the fixed asset investment again was above 20% year on year. China has been relying heavily on the fixed asset investment for its growth profile and is likely to continue to depend heavily on this formula to generate further growth. Read the rest of this entry »
China’s equity market has been a laggard for at least the past 3 years. For example, between 2011 and 2012, China H returned -8% for the investors, while S&P returned +16% for the same period. In 2013 at the time of writing (May 14), China H returned -2% while S&P returned another +16.5%. No wonder a lot of money managers, especially from the West, dislike China.
The common arguments to suggest a bearish view on China include the following:
1. China invested too much and consumed too little. Evidence includes the empty city (ie, Ordos) and shopping malls built in the country, and a massive property bubble (ie, 1000 times Dubai to quote Jim Chanos, one of a vocal China bears).
2. The shadow banking system in China, which is off the balance sheet of the banks. No one knows exactly the scale of the shadow banks but it feels big, especially given that Chinese authorities (ie, the central bank) continue to deny the potential bad loan from this sector (it kind of becomes a custom that the more Chinese authority denies something, the more credible it becomes). Read the rest of this entry »
Recently the housing price in China seemed to have calmed down. However, it is probably still too high considering the price of the house to the income level of the local residents. It is estimated that Dalian and Hangzhou have the highest (housing) price to income ratio in China. Internationally the price to income ratio need to come down to below 8 for houses to become affordable – in China only Changsha and Dongguan seem to be affordable under this criteria.
IS China’s housing price expensive? Depends. Expensive is always a relative concept. This chart compares the housing price in a lot of Chinese cities to that of the United States, and it seems that the housing prices in two countries are quite similar.
A lot has been said about the potential rescue from China to the current European debt mess. For example, Mr Yu Yongding, a former member of China’s central bank monetary policy committee, wrote in Financial Times (Oct 31, 2011) that “Beijing will not ride to eurozeone’s rescue”.
I would argue the opposite in this article. To understand this issue more deeply, one need to start with a few numbers.
As of Oct 2011, China held a total foreign reserve worth of about 3.2 Trillion US Dollars, with a wide margin ahead of other governments with large foreign reserves such as Japan (less than 1.5 Trillion USD) and Russia (about 500 Billion USD). During January 2011 to September 2011, China has accumulated 354 Billion USD worth of foreign reserve, which was equivalent to about 1.3 Billion USD per day and almost 1 million USD per minute. Read the rest of this entry »
Which countries will be hit hard if China lands hard? According to Maplecroft, There are a list of countries at the extreme risk if China lands improperly, including Mongolia, Singapore, South Korea and Australia.
绝大部分经历过债务危机的国家都会选择西医疗法，因为这种方法虽然在短时间内要经历很大的痛苦，但是耗时短见效快，咬牙坚持忍一忍，危机可能就过去了。 对这些国家渡过债务危机的历史进行的研究发现，基本上他们扭转局势都需要两个必要条件：第一就是快速和大规模的本币贬值，第二就是债务重组。这两个条件缺 一不可。大规模的本币贬值，让债务国的国际竞争力在短时间内成倍上升，为以后经济恢复元气夯下基础；债务重组让债务国的还债压力得到暂时的缓解，不至于被 过多的债务压得喘不过气来。 Read the rest of this entry »
China is one of the world’s biggest consumers and importers of Soybean. In this sector, there are quite a few large players in the crushing of imported beans. The biggest of all is Wilmar, which controls about 17% market share of China’s soybean crushing, followed by China Agri (12%), Chinatex (9%), Cargill (9%) and Jiusan (6%). Most of the imported beans are GMO.
During the ten years between 2000 and 2010, the GDP per capita of China has increased dramatically at an annual pace of almost 40% per year. The only big country that has grown faster than China in terms of GDP per capita is Russia. Japan is a major country that has grown the most slowly, with an annual growth rate of slightly above 1% per year.
China’s addiction to GDP growth can be traced back to 1992, more than a decade after the first stirrings of a market economy were launched with the establishment of the special economic zones. The student protests and subsequent clampdown in Tiananmen Square in Beijing in 1989 led many in China’s leadership to question the idea of opening up to the outside world. They worried that the introduction of capitalist-style reforms would inevitably weaken the political structure and so the atmosphere was tight and cautious as China entered the 1990s.
Now technically retired from his role in the leadership, Deng took it upon himself to revitalize the reforms he had first put in motion. On a tour of Shanghai, Shenzhen and other cities that had already seen some of the benefits he foresaw for the country from the reform program, Deng told audiences that for China, “growth is the first principle.” He reassured Communist Party members that the leadership would support local efforts to open up the economy and encouraged everyone to continue with the reforms he had started. The official media gave blanket coverage to the tour and speeches, ensuring that Deng’s words would be taken as party doctrine. Read the rest of this entry »
How much money has China invested outward as of today? This is an intriguing question to a lot of researchers and industry analysts. According to Heritage Foundation, China has since 2005 invested a total of $376 Billion world wide to other countries.
种种迹象表明，如果欧洲政府和中央银行再不采取果断的措施，世界经济很有可能再次跌入衰退的深渊。 很多人对2008年的金融风暴仍然记忆犹新，但是我们今天面临的境况可能比2008年还要严重。主要原因有三：首先，2008年的金融危 机始发于美国，当时的美联储和联邦政府财政部为了应对危机，采取了强有力的措施，比如在短时间内通过TARP（Troubled Asset Relief Program）以及联储的第一次量化宽松。这次的金融危机更多源于欧洲，而由于欧洲独特的政治体制，以及其央行对待危机不同的态度，很难像美国那样，在 短时间内通过大规模的金融方案以稳定市场的信心。
其次，2008年金融危机的时候，全球各国央行纷纷降息，政府纷纷增加财政支出以刺激经济，因此财政政策和货币政策的双重作用，令全球经 济在2009年迅速探底回升。 但就今天而言，大部分国家的利率已经处于零位或者接近零位，因此下调空间十分有限。同时，大部分政府都为过高的债务，而 不得不紧缩开支或者增加税收，要这些政府再一次启动新一轮财政刺激几乎不太可能。因此，如果金融危机再袭，能够应对危机的政策工具已经少了很多。
很多人觉得，发生在欧美的金融危机可能和自己关系不大，比如新加坡的经济增长依然高于欧美诸国，失业率仅为2%，房价也节节攀升，似乎天 下太平。但经历过2008年危机的人们都会记得，当欧美经济陷入衰退的时候，海外订单可能会大幅缩水，各银行不得不大规模裁员，同时海外雇员很可能由于失 业，不得不回去他们的家乡，造成人去楼空的结果。因此即便经济危机由欧洲而起，但由于国际经济的相关性，新加坡几乎难以避免被波及。 Read the rest of this entry »
China’s urbanization rate is still relatively low compared to most other developed countries in the world. The new 12th 5-year plan continued to support growth through urbanization across the country. Such a prospect shall provide better chance of a continuously high growing economy in the coming future.
I believe this video is worth watching. Chanos’ argument was very convincing and made him stand out against the China bull next to him. Chanos’ reasoning was convincing in the sense that he presented figures and facts, and reached his conclusion based on sound theoretical foundation. Read the rest of this entry »
Does China have a property bubble? If so what stage is the bubble at? Will the bubble burst? These are questions that have been debated repeatedly among scholars and market observers, yet with strong divided opinions. One of the reasons for the divided views is that it seems quite difficult to agree on the facts to start with. Take the construction pace, for example. Read the rest of this entry »