China's Economy

[saroq]

No, i'm not getting nasty at all, but i don't appreciate you assuming that i'm living an insulated expat life oblivious to all that goes on around me. which is what you were assuming.

Now, if you'll excuse me i need to go start a thread and abuse the Russian government about how they hunt down and execute oligarchs.....They really piss me off

And good luck with that. Let's hope that you can keep your personal bias out of that thread.

 

[Zedd]

If I can put my in:

China is a work in progress, economically and socially. The decision was made in the last civil war to go down their current path of communism. Considering some of the lost efficiencies in our own nation, I still think the jury's out on who's got the right idea and only time will tell. Have a look at the health outcomes in China vs US and then consider the $$$ spent per capita and tell me which government is delivering a better service to it's people. And not to trivialise the abuse, but after the recent Snowden releases, the majority of polls showed US citizens were in favour of giving up more of their rights, for a greater level of personal security.

I think human rights abuses are happening without a doubt. There are too many reports for them all to be false, or propaganda. But there's also a lot of improvement going on, some from internal drivers such as desire for a healthier and better educated population, and some external drivers, such as international companies not wanting to be associated with pseudo slave labour.

International companies certainly do have the opportunity to influence working conditions, as well as product quality and traceability. They're not in business though to solve all the world's problems.

Through trade, and dialogue, regardless of the form of governance, I think the standard of living in China will continue to rise. At the same time I think it's important that issues of human rights are discussed, and encouraging China to stop any such abuse, whether its systemic or not. But broad generalisations such as "No one in China is innocent that's how the communist thugs keep control" will achieve nothing.

 

[CanOz]

And good luck with that. Let's hope that you can keep your personal bias out of that thread.

I added my personal bias to balance Nottings view. Add your view for balance if you like, if not then run along.

China is not all bad, mostly...but not all.

Lots of stories about the past, its improving for the majority, slowly.

Thats my view.

 

[CanOz]

I knew i sensed that Notting had some kind of strange vendetta against the Chinese....this is where it started....Notting, did you lose some money on Sundance?

Where's Sinosteel???? As if.
It's the same company China inc.
Sometimes China inc makes low ball offers to keep the price up so they put off genuine alternatives, take board positions and then make deals to suit themselves. They also figure no one else will come along with the price up and costs to come, they can increase their holding keep the price up, suck in the share holders with capital raising, having inflated the price so then China inc doesn't have to do the real funding and their happy and off they go with the goodies from the ground to make money out of what they make it into.

Sundance needs plenty of help to get this happening and the Chinese seem to be the only willing partners at this point. Board is right to fight the pricks off but that can be hard when they need them as partners.

Is that reason not to be happy?

Expect to see many confused messages coming out.
Their good at offering underhanded payouts to board members too, one way or another. If the member ever do something they don't like well - Remember a guy called Stern Hu???
How did they manage to take all Rios computers as part of their investigation!!
HHmmmm corporate espionage right out in the open. Wheres Rupert? News was quiet on all that given what it was.

We should have been protesting in the streets.

Wonder whats on the table for Stern today?

They pay they own you.

Maybe you guys should look at RCI to see how Chinese take overs go. When an Indian company was bidding for RCI the Chinese came in and made dummy bids to knock up the Indian one to about .515c which depended on due diligence. The Indians then walked away after due diligence and the the Chinese went dead silent. RCI fell down to .125c!! when the Indians walked away and whilst it was doing that a Chinese director - Wu Pun Yun increased his holding massively to 50.4%holding.
The Chinese came back after 6 months and made a hostile bid at 25c! They had to raise it to 30c because 25 was against the law!!! to come back so low so soon or something like that. They are now lapping up stocks at that level at present of 30c. RCI has asked it's share holders who hardly exist any more to reject it.

What will happen to Sundance? Don't know because nothing happens the way you think it will on the market. But, my guess is that, in the absence of a bid from a non Chinese inc company which is highly unlikely, gradual decline amidst sneaky, Chinese accumulation. Then in 6 months it might be worth taking a bite but the Chinese may be able to control through board arm bending and live monkey brain eating parties. So will not bother to do anything more.

An alternate bidder will have to have very deep pockets after paying 1.5Billion and needing another 3 (+Blowout) Billion for development. Hanlons 18% holding will also be obstructive. To be fair to shareholders who are prepared to wait, SDL should take it's time and not rush into anything.
India and other developing nations need iron oar too and demand isn't going away soon. Combined financing would be more valuable to share holders over the longer term rather than being subject totally to merciless Chinese.
Xtrata would be an ideal alternate buyer for SDL. Did Xtrata announce they were not interested?

You could also look at BMN to get an idea of how Chinese raids go. BMN has a highly conditional offer of 61.5c on it and its trading today at.35c! The will Chinese examine every inch of the company with as much intimidation as possible which will likely go on for months according to the recent board announcement.
Who knows they may offer 25c after that. I have being buying that recently however so I must think it will happen.
China loves nuclear things!

China is more likely to intemperate this in the light of -the way it behaves - which is to play dirty and do anything without conscience.

So China will think Australia is trying to some how interfere with the negotiations with sovereign motivations. It will make them all the more keen to win these assets.
So I think the last thing I'm expecting them to do is walk away in protest.

Should SDL trade at significant discounts when they re open as BMN have I reckon it will be a good opportunity.
Although I also think that getting a higher price as the board is trying to do maybe difficult. China could walk away to try to make SDL crash then come in with more buying when it's in the can. That's the more likely danger. BMN on the other hand is something I feel they will try to take and is more fairly valued by the current bid.

I have been buying more BMN this morning.

and on and on...Who is biased?

When did you buy Notting, the top?

 

[notting]

I knew i sensed that Notting had some kind of strange vendetta against the Chinese....this is where it started....Notting, did you lose some money on Sundance?

No.

I made money out of it!
I was jumping in and out allot, got out on the ups. When the Chinese were printing in their own lying propaganda media that it was kind of home and hosed I sold. Then when it was ramped down, i bought again. Then when Hanlon assured the markets that they were in the final stages of securing finance, I sold. They always lie.
Then I waited and when Hanlon announced again that they had a number of partners interested, it contradicted the 'final stages' announcement So I sold into that rally. SDL then said that Hanlons payment of it's first trance to cover take over costs was a sign Hanlon were going to do the deal I new it was not going to happen. I trashed SDL (not Hanlon) at that moment if you want to bother to look.

Beside all that. I am not so pathetic that I would hold that as a grudge. That would be totally my fault.
I found that whole thing rather fascinating as you can see when you know the way the Chinese work, you can play them as I did. Although The Muffin Man really helped me with that post, because until he said that no one was contradicting the story that this was as good a find of iron as any!!! That was weird.
That's why I write here because the press are too worried about losing Chinese business to write the realities about China. This is changing a little at the moment and ever since google got booted out it's easier to get stuff on the real China. when Google were trying to play along they were curbing allot!

You may also note the comments I was making about China during the final stages of the resources boom whilst others were posting up amazing skyward charts on the resources I was posting charts of the Chinese stock market and talking about what every one else is talking about now!!! Since the US 60 minutes stories on the fake Chinese Apple stores (where the Apple garbage started, which the Chinese retaliated against with protests about working conditions) and the 60 minutes stories on the property bubble.

I have nothing against the Chinese people, I am for them.

I have every thing against the Communist lies, torture, cheating and corruption, occupations, territorial claims.
Every Australian should feel the same. Just recently they called for an end to the hacking and at the same time hacked into the Reserve bank of Autralia within 36 hours of making that public call for the hacking wars to stop, only after they were exposed.!!!
I say it as it is and find it amazing that there is resistance to it.
I don't however want to make your position difficult so am thoughtful of that but Jeez, stay in Canada dude, it could get really ugly there soon.

Further, I have also said that I like the new leader and so far he has done some really good things and there is hope there. I also said I hope he doesn't get taken down in the revolution if it happens that would be sad. So I'm not stuck in my ways so to speak.

I call it the way I see it and I know allot about them!!

I have had insight at the highest levels of corporate negotiations with Australian and the Chinese. They are disgusting what they do to humans to animals and to their own people. This needs to be known so you don't lose billions like Tesltra did with Ziggy when I was telling them to not do it!! If you want to point to a gripe well that's where one small one was.
The rest is just being a decent human being able to look at oneself and say, well at least I didn't cast down my eyes and say nothing!

That's where I'm coming from.

Sorry if it's boring. I have found it useful to trade on so there is relevance for others there too if that's all they care about.

 

[Trembling Hand]

The rest is just being a decent human being able to look at oneself and say, well at least I didn't cast down my eyes and say nothing!

That's where I'm coming from.

Sorry if it's boring. I have found it useful to trade on so there is relevance for others there too if that's all they care about.

Notting you still take part in their economy though don't you?

 

[notting]

Notting you still take part in their economy though don't you?

Yes.

And I'm of the belief that this is better than leaving them closed off to the rest of the world, for the people. Nth Korea is the closed model.
Dealing with them , will hopefully, help them realise that their ways are not only deplorable but not as good for business, which is what they worship.

Noticed this morning that now the Chines are hacking into BMW for pollution!!!
Yeah all the pollution is from these foreign companies. Nothing to do with communist dictators reckless short term environmental policies made to attract business from the world to line their own pockets at the expense of the people.

The dictators and their connected business cronies can fly out with all their money to live in the free west.
They are doing so at quite a pace at the moment.
The people stay to breath the air of death and drink from the poisoned rivers.

 

[saroq]

I added my personal bias to balance Nottings view. Add your view for balance if you like, if not then run along.

China is not all bad, mostly...but not all.

Lots of stories about the past, its improving for the majority, slowly.

Thats my view.

What part of my comments disagreed with the premise that "China is not all bad"? My comments were these 1. That life has improved for hundreds of thousands of Chinese people, but let me add that the figure is without a doubt in the millions. 2. An expat does not know what life is like for many Chinese people. This is because the expat is not a migrant worker and enjoys a quality of life and treatment that is much higher than many workers in China. Being married to a Chinese woman does not change that. 3. That a company like Apple cannot pretend that it doesn't know how its cheap production cost are being achieved http://www.abc.net.au/news/2013-07-30/hidden-human-cost-of-smart-phones/4854412

It is you who should run along if you cannot respond accurately and civilly to the posts of fellow ASF members.

 

[CanOz]

I like to think of myself as trying to see both sides of an argument. Its been those times that i disagree with people so strongly that i wonder why i bother with forums. I tried to present the other side of the argument, which i think Zedd did very well for me (thanks Zedd). I just think people should go and have a look at a country, feel the culture, try to understand the environment on the ground, like Jim Rogers does. Then form a balanced view. Perhaps i didn't present my view as being balanced, if so then that's my fault and i apologize.

I have no further comments on the subject and I'll "run along" now. From now on any comments on China will be in response to direct queries about life here now, or facts that i find regarding the economy.

 

[sydboy007]

interesting graph from FTalphaville

Doesn't bode well for the ghost cities they've built.

 

[Gringotts Bank]

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Came with a 4 level adbestable resolution feature: 800/1600/2400/3200dpi(can be switched easily with the dpi buttom).

Applicable for entry to advanced users.

 

[sydboy007]

Two reports in Chinese media highlight different aspects of China’s unfolding demographic crunch. The Ministry of Education reported Aug. 21 that more than 13,600 primary schools closed nationwide in 2012. The ministry looked to China’s dramatically shifting demographic profile to explain the widespread closures, noting that between 2011 and 2012 the number of students in primary and secondary schools fell from nearly 150 million to 145 million. It also confirmed that between 2002 and 2012, the number of students enrolled in primary schools dropped by nearly 20 percent. The ministry’s report comes one day after an article in People’s Daily, the government newspaper, warned of China’s impending social security crisis as the number of elderly is expected to rise from 194 million in 2012 to 300 million by 2025.

Talk about demographic headwinds.

 

[sydboy007]

good video of the debt bubbling near ready to burst


http://video.ft.com/v/2629849670001

 

[sydboy007]

http://www.businessspectator.com.au/article/2013/9/17/china/china-cracks-down-foreign-business

yet they still have the gawl to have hissy fits over us taking a hard look at their investments here.

I say lets just apply the same standards China applies to us on their home turf and see how that goes down

 

[stockGURU]

China October Industrial Output Growth Tops Estimates at 10.3%
By Bloomberg News | November 09, 2013

China’s industrial output rose 10.3 percent in October from a year earlier and retail sales gained 13.3 percent, the National Bureau of Statistics said on its website today.

Fixed-asset investment excluding rural households in the first 10 months of the year increased 20.1 percent, the Beijing-based agency said.

The advance in industrial production compared with the 10 percent median estimate in a Bloomberg News survey of 44 economists and a 10.2 percent increase in September. Retail sales (CNRSCYOY) compared with the median projection for a 13.4 percent advance and a 13.3 percent increase the previous month.

More: http://www.businessweek.com/news/20...put-growth-tops-estimates-at-10-dot-3-percent

Is Chinese economic growth back on the boil? How will this affect commodity prices?

 

[CanOz]

A view from my newly leased apartment in Harbin, China...tonight...

 

[sydboy007]

http://www.bloombergview.com/articles/2014-06-19/why-living-in-beijing-could-ruin-your-life

The World Health Organization and other public health entities use a measure dubbed “health-adjusted life expectancy” -- or HALE -- to judge how much of an average lifespan will be free of disease, disability, and other impediments to normal, healthy functioning. For developed countries, the gap between HALE and traditional life expectancy is usually around eight to 12 years, according to a 2012 study published in the Lancet, reflecting access to high-quality, life-extending health care. So, in 2010 Japanese men could expect a HALE of 70.6, compared to life expectancy of 79.3, and Japanese women could expect a HALE of 75.5 years, and traditional life expectancy of 85.9 years.

The true size of the gap, however, was shocking. While life expectancies have continued to grow, HALE numbers have gone backward. According to a summary published to the Beijing CDC’s website, the data showed that an 18-year-old male Beijinger now has a life expectancy of 80 years, and a shockingly low HALE of 61.4. Far worse, and almost defying believability, an 18-year-old female Beijinger has a life expectancy of 84, and a HALE of 56.06. In other words, she should expect to spend 28 years -- or roughly 41 percent of her remaining life -- in ill health.

 

[DB008]

It Only Took Four Months For China To Achieve A Jaw-Dropping Reduction In Carbon Emissions​

China is the world’s largest greenhouse gas emitter, so small decreases in its emissions seem like monumental feats when compared to other countries. According to a new analysis, in the first four months of 2015, China’s coal use fell almost 8 percent compared to the same period last year ”” a reduction in emissions that’s approximately equal to the total carbon dioxide emissions of the U.K. over the same period.

The analysis, published by Greenpeace and Energydesk China, reviewed data from a number of sources, including China’s industrial output, and found that China had reduced its coal output by 6.1 percent in the first four months of 2015. The research team calculated that the drop in coal use translates into a nearly 5 percent drop in domestic CO2 emissions.

In 2014, China cut domestic consumption of coal by 2.9 percent, the first drop in more than a decade, with coal production also falling 2.5 percent. China’s carbon emissions also fell last year for the first time in over a decade, dropping 2 percent in 2014 compared to 2013.

While China is rapidly pursuing clean energy technology ”” with solar growth that dwarfs any other country ”” and also closing hundreds of coal plants in response to domestic air pollution issues and a shifting fossil fuel landscape, the real reason for the dramatic fall in emissions is likely the country’s sluggish economy. So far in 2015, China’s economy is growing slower than the government’s desired 7 percent pace ”” a trajectory that puts it on course to have its weakest economic year in a quarter of a century.

But while China’s economic growth may turn around, its coal use will not. Late last year the government announced it plans to cap coal use by 2020, a necessary target to meet its global pledge of peaking greenhouse gas emissions by 2030. Reducing its use of coal, which still generates three-fourths of China’s electricity, is also a key element of China’s renewable energy target of 20 percent non-fossil fuels in “primary energy consumption by 2030.”
As the Wall Street Journal reports, all these factors are coming together in the country’s upcoming overhaul of its power industry, which will be “bad news for coal-fired plants.”

http://thinkprogress.org/climate/2015/05/15/3659355/china-coal-use-drops/​

 

[sinner]

I don't have a horse in the race either way (yet), except for through whichever underlying stocks in various indices I hold which may have China exposure.

One valuation metric which is useful for applying across countries is the "Total Market Cap / GNP" ratio, which I couldn't get a hold of, but the World Bank has historical data for TMC/GDP, which is a close enough proxy I guess (they released the 2012 datapoint EOFY, a bonus for us). A quick chart:

View attachment 53191

A shorthand forecast using the 2012 TMC/GDP number assuming 2%/annum growth in EPS and 2% dividend yield:

1.02 * (0.65/0.449)^(1/10) - 1 + 0.02

(as per http://www.hussmanfunds.com/wmc/wmc130318.htm)

returns a (crude but effective) forecast 10Y nominal total return of 7.8%/annum, which isn't backup the truck zone (considering the potential for volatility), but certainly priced significantly cheaper than a lot of other country indices. A similar but more generous forecast for the US (6% EPS growth and 2% yield, but TMC/GDP is much much higher) only returns a forecast return of 3-4%/annum.

The magic of valuations. Above post from July 2013.



So is China in a stock bubble? Or was the spike higher simply bringing it in line with valuations for indices across the world, from a very very cheap starting point?

I approximate the China market cap today at ~$10 trillion and the GDP at ~$9 trillion (this is a complete back of the napkin approximation). Using the same formula as above (2% growth, 2% yield) we are looking at a forecast 10Y nominal return of -1%/annum.

At the time, everyone was expecting China to crash further.

Greek, Russian, Mining stocks, anyone?

 

[satanoperca]

So is China in a stock bubble? Or was the spike higher simply bringing it in line with valuations for indices across the world, from a very very cheap starting point?

That depends Sinner, if the valuations of other indices around the world are fair value or over valued, it is all relative.

Cheero