Chinese Economics Thread

tphuang

tphuang

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things to consider

Which. much a historical time if you consider that Brazilian central bank is increasing gold & RMB in its holdings and getting into using RMB to trade with China. China is buying more iron/corn from Brazil, maybe that can be settled in RMB going forward.
https://twitter.com/i/web/status/1641293169013784578
And of course, Lula is visiting on the 11th. This is a huge deal.

Another important thing, using CIPS is something people continue to overlook, but it's happening as part of more countries using RMB for settlement
https://twitter.com/i/web/status/1641351005777395713

USD reserves as % of overall has been declining and i would assume this trend has accelerated. This chart only shows things as of 2021. I think as Russia, Brazil and middle eastern countries buy more Chinese assets, RMB forex reserves will also increase a lot by the end of this year. There are huge implications to these moves. We are in the very early innings of this. I would argue we are still in the pre-seasons. But when things get rolling, they can move really fast
https://twitter.com/i/web/status/1641224466742083584

This is an end goal. Using RMB to settle energy trades is a way to get oil/LNG exporters to use Shanghai exchanges
https://twitter.com/i/web/status/1641280942714261505

I don't agree with the assessment that China needs to become a net importer, but I do think they should move most of the low end industries to ASEAN countries, Central Asia and southern Asia allies like Pakistan/Sri Lanka. That's what you want
https://twitter.com/i/web/status/1634093025143169026
 
T

tamsen_ikard

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When do you guys think China will surpass US nominal GDP?

I think it will happen earlier than people think these days because of the coming recession in the US which will pop many bubbles.

China on the other hand has already popped many of its own bubbles in the last few years.

My prediction is 2028, 5 years from now. This will be achieved with a 5% gdp growth in china plus 2% inflation plus 1% yuan appreciation due to US money printing to solve the coming down turn.

That gives China a combined growth rate of 8% per annum in nominal growth. US will be stagnated at 2% growth in nominal terms due to the downturn which means it will be stagnant other than inflation.
 
tphuang

tphuang

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Let's not laugh at India. I think we do too much of that here.

Anyhow, on migrating of money back to HK from the West. If you are China, you want HK to be the economic center of Asia vs Tokyo and Singapore. You'd rather that be Shanghai, but we are not at that point yet. The other thing to consider is that HKSE just has much greater market value than SGX.
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Last week, Hong Kong also attracted dozens of top family offices from mainland China, the Middle East, the US and Europe in
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— all part of a government push to have them set up their regional headquarters in the territory.
It is a push that is needed to help the city catch up. Singapore had an estimated 1,500 family offices by the end of 2022 with a relatively loose tax incentive threshold of at least $7.5mn in fund size. Hong Kong’s goal is to attract “no less than 200 family offices” to expand or set up in the city by 2025.
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HK is definitely fighting against Singapore here. I know that a lot of people moved from HK. to Singapore during COVID time
Roughly 40 per cent of the assets under management in Hong Kong’s private wealth management industry now come from mainland China — up from about 35 per cent in 2019 — according to a report by KPMG and the Private Wealth Management Association in Hong Kong, last year. It surveyed 36 financial institutions and more than 200 wealthy clients in the city.
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and HK really depends on managing money from mainland

Other things to consider is how well they can attract companies to HKSE
Recently, JD.com floating spin off to HKSE
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but the big catch would be Aramco doing secondary listing in HKSE and if some of these large Russian energy/mineral companies
https://twitter.com/i/web/status/1641415403116142595
I think there are quite a few large companies from global south that HKSE should try to woo.
Everyone wants the prestige of being listed on NYSE/Nasdaq or even LSE. But maybe political pressure can push more companies to list in HKSE.
 
siegecrossbow

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