When you hear Western "analysts" trying to analyze China's economy, it's like listening to kindergarten students trying to explain Einstein's theory of relativity. They entertain you when they talk, but you must not give any importance or weight to their opinions.
There is nothing difficult to understand about the CCP's economic system. A typical export led development project which had some favorable demographics behind it until circa 2015, and which avoided the 2008/09 "Great Recession" by promoting the most massive property bubble in history which is finally and predictably going bust with all the consequences that invariably accompany RE busts. There is no magic or 4D chess going on with the CCP's economic development project. But at least the People's Republic has finally caught up with Latin America on a per capita income basis, better than that disastrous Chairman Mao.
@@michaels4255 You are exactly what I describe in my first post. A guy who thinks he knows, and tries to describe and in the end manages to make us all laugh out loud. thanks very much dude
Westerners don’t get China. Most Chinese people aren’t living on three generations of wealth. Most of them grew up in poverty and came into money only 20 years ago. Their ideas of consumption and saving is fundamentally different. That said, the government’s deliberate popping of the property sector is a positive development. It will keep cost of living inflation under control along with labour costs, which is critical to export competitiveness.
There are misconceptions of the topics you've mentioned here: 1. RRR cuts & mortgage rate cuts for 2nd homes don't make the Yuan/RMB cheaper. In fact, the reality is reversed. China has long passed as export led economy since more than decades ago. The reason why Yuan/RMB because of Chinese weakening economic fundamentals due to the deleveraging policies more than 3 years ago. It's trending lower because of low consumer confidence which also affecting the consumption growth which was caused by their government's planned on deleveraging the real estate market a.k.a planned bubble bursting of high indebted real estate. Take note majority of wealth in Chinese consumers were tied up from the real estate. With low consumer confidence it drags down also the business confidence hence, businesses are thinking twice to invest. Coupled with China's deleveraging on local govt debt, it's basically consumer + business + local govt now are cutting down spending. With these cuts and huge support directly from PBOC, the central govt now sending message to all 3 components to basically spend spend. With these, Chinese fundamentals where domestic consumption takes as major growth drivers since 10 years ago and moving forward has considerable support now. That's why RMB/Yuan has now breached back to 1 USD = 6.99 RMB today versus 1 USD = 7.12 RMB last week, basically strengthening their currency not weakening. If you listen to their govt's plan, the domestic consumption takes the center stage for the future growth of China. You can't have a good consumption growth if your currency is weak. 2. The reason why they're supporting the stock market & financial markets because they want to divert the consumer's investment from real estate to stock market/financial market instruments. What's happening right now is that since real estate market is down and due to deleveraging campaign from their govt and low consumer confidence, their stock market is down as well. The consumer's are saving cash instead (hence record high savings rate currently). They are now telling their people that you can basically invest and make money from stock market/financial markets instead of parking their cash to real estate or save in their purse/banks.
I just have a question about the renewable energy, how realistic is it to support the affordable energy needs for both developed world and developing world? So call renewable energy is for ling term plan, how long? 30 years?
I think the real reason for weak oil prices is a weak global economy, not competition from frackers, whose production is, AFAIK, still below its record pre-covid levels.
When you hear Western "analysts" trying to analyze China's economy, it's like listening to kindergarten students trying to explain Einstein's theory of relativity.
They entertain you when they talk, but you must not give any importance or weight to their opinions.
True
There is nothing difficult to understand about the CCP's economic system. A typical export led development project which had some favorable demographics behind it until circa 2015, and which avoided the 2008/09 "Great Recession" by promoting the most massive property bubble in history which is finally and predictably going bust with all the consequences that invariably accompany RE busts. There is no magic or 4D chess going on with the CCP's economic development project. But at least the People's Republic has finally caught up with Latin America on a per capita income basis, better than that disastrous Chairman Mao.
@michaels4255 yes but at the same time they are leading the way in the most advanced technologies
@@michaels4255
You are exactly what I describe in my first post.
A guy who thinks he knows, and tries to describe and in the end manages to make us all laugh out loud.
thanks very much dude
Westerners don’t get China. Most Chinese people aren’t living on three generations of wealth. Most of them grew up in poverty and came into money only 20 years ago. Their ideas of consumption and saving is fundamentally different. That said, the government’s deliberate popping of the property sector is a positive development. It will keep cost of living inflation under control along with labour costs, which is critical to export competitiveness.
There are misconceptions of the topics you've mentioned here:
1. RRR cuts & mortgage rate cuts for 2nd homes don't make the Yuan/RMB cheaper. In fact, the reality is reversed. China has long passed as export led economy since more than decades ago. The reason why Yuan/RMB because of Chinese weakening economic fundamentals due to the deleveraging policies more than 3 years ago. It's trending lower because of low consumer confidence which also affecting the consumption growth which was caused by their government's planned on deleveraging the real estate market a.k.a planned bubble bursting of high indebted real estate. Take note majority of wealth in Chinese consumers were tied up from the real estate. With low consumer confidence it drags down also the business confidence hence, businesses are thinking twice to invest. Coupled with China's deleveraging on local govt debt, it's basically consumer + business + local govt now are cutting down spending. With these cuts and huge support directly from PBOC, the central govt now sending message to all 3 components to basically spend spend. With these, Chinese fundamentals where domestic consumption takes as major growth drivers since 10 years ago and moving forward has considerable support now. That's why RMB/Yuan has now breached back to 1 USD = 6.99 RMB today versus 1 USD = 7.12 RMB last week, basically strengthening their currency not weakening. If you listen to their govt's plan, the domestic consumption takes the center stage for the future growth of China. You can't have a good consumption growth if your currency is weak.
2. The reason why they're supporting the stock market & financial markets because they want to divert the consumer's investment from real estate to stock market/financial market instruments. What's happening right now is that since real estate market is down and due to deleveraging campaign from their govt and low consumer confidence, their stock market is down as well. The consumer's are saving cash instead (hence record high savings rate currently). They are now telling their people that you can basically invest and make money from stock market/financial markets instead of parking their cash to real estate or save in their purse/banks.
Thanks guys great conversation as always.
I just have a question about the renewable energy, how realistic is it to support the affordable energy needs for both developed world and developing world? So call renewable energy is for ling term plan, how long? 30 years?
I think the real reason for weak oil prices is a weak global economy, not competition from frackers, whose production is, AFAIK, still below its record pre-covid levels.
can i ask what platform you use. like LSEG refinitive bloomberg xenith
Thanks Guys a awesome video as always a great break down
No timestamps? :-(
thank you
You are in trouble not China.
US and China both have problems, but it is better to be a rich country with problems than a poor country with problems.
Must be a joke coming from a Brit. Even India overtook their colonial master.
Great analysis on energy and oil. Can we please have more contents and analysis on energy/energy transition/oil?
a very timely topic awesome!
37 minute video with 0 minutes of preparation.
Looking at the stock market in China as an indication of their economic performance is a huge mistake. It's a sideshow over there. A hobby.
🙏😊👍
cheers