The story said there were ~130 new startups in 2022 when interest rates were increasing quite violently
Chinese Economics Thread
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That seems like just speculations on your part. Given that the economy is growing really fast right now, I would say the lack of inflation is a good thing. Seems to me that China made the right decision in not issuing stimulus to jump start the economy.
by any historical measure, interest rates in 2022 was low. It doesn't matter that interest rates were rising. Borrowing cost was still extremely low by historical standards.
Running your economy on close to 0 interest rate for 15 years is a really stupid thing to do
Anyways, I don't have any wisdom to offer other than this. Back to looking at industries.
supercat
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The Bank of America raised its forecast for China.
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That's already been discussed at length here, both from members saying it was bad policy and others asserting the government knew what it was doing. In the end, however hamfisted the policy was, its done and we can only look to the future now.
However fast it may be growing, it's clearly growing below trend as indicated with low inflation (even below the PBOC's target). And that there apparently are profitable investments to be had (referenced from SME surveys) but no one wants to take those NIMs is evidence of bad allocation
Yes, it does. The discount rate increasing inherently cuts valuations. The discount rate going from 0% to 4% with expectations of rate hikes into the yazoo in 2022 will cause valuations to fall substantially
Again, this is all a guess on your part. There could be a lot of reasons why SMEs may not have access to the fundings they need.
It would be better if you actually know some people inside China that can explain the problem here.
We are talking about new startups, which I have 1 right now. For me, it's all about what rate I can borrow money at. Whether it went up recently and by how much doesn't factor into whether or not I will borrow me.
Anyways, good article here by David Goldman on China's continued progress to move forward in its economic development
China has the world's largest auto/battery industry and it just continues to grow.
With Huawei unveiling MetaERP, Oracle and SAP to lose a lot of customers in China and surrounding regions. Ultimately, that's kind of the goal China has. To develop cheaper version of everything that the world's commerce, tech depend on and then replace the Western ones.
Getting closer to my 6.5% prediction at the start of the year.
Anything above 6% would be a big success given the economic downturn in the West
6% would be a disappointment. 6.5% would be expected. 7% would be a success. I am not ruling out 7%+ growth.
I also discussed rest of the battery supply chain investment in Q1. This kind of investment in 1 quarter just shows the massive effort needed to support future applications in EVs and ESS. SIB wide deployment isn't happening for a couple of years. You need cathode factory capacity to ramp up first.
Despite this narrative about Chinese gov't doing centralized planning, it's just not true. Chinese gov't set the priorities and use capital to help its businesses, but the businesses themselves make decisions on what to invest and how to cultivate upstream suppliers. It takes long time to build this up. No central gov't is capable of doing that by itself. Also makes the entire US gov't approach of IRA and getting lithium mining rights laughable. You need so many things to go from lithium carbonate to a battery. Politicians are just not capable of understanding these things. It takes tremendous training and experience to build something like this up. That's how Chinese battery supply chain have captured Korean battery makers.
Despite this narrative about Chinese gov't doing centralized planning, it's just not true. Chinese gov't set the priorities and use capital to help its businesses, but the businesses themselves make decisions on what to invest and how to cultivate upstream suppliers. It takes long time to build this up. No central gov't is capable of doing that by itself. Also makes the entire US gov't approach of IRA and getting lithium mining rights laughable. You need so many things to go from lithium carbonate to a battery. Politicians are just not capable of understanding these things. It takes tremendous training and experience to build something like this up. That's how Chinese battery supply chain have captured Korean battery makers.
So I saw this today
I hadn't realize the extent to which renewable energy agreements were signed between China and Brazil
So I did a search and found this
Unbelievable stuff
Just in the state of Ceara:
Deal signed w/ Mingyang, SPIC, PowerChina, Envision, BOC & HW for renewables, green hydrogen & tech
check on the map where Forteleaza is, perfectly located to capture offshore wind and/solar and can easily ship green H2 to Portugal
Now go back to the top and see deal with Mingyang and SPIC finalized
Aside from just that 1 state:
SPIC w/ more renewable/H2 project at Rio
Develop HV DC transmission from hydro plant
ZTE to provide 5G to Brazil
ICBC/Banco do Brasil cooperation on financing climate change projects
JAC motors provide 280 electric trucks
5 COSCO ships to transport bio products (Brazil exports a lot of biodiesel)
So, huge cooperation bw China and Brazil in power sector, especially projects involved in energy transition. That's kind of what Saudis are getting from China also. Main diff being Saudis want solar->H2 and Brazilians want offshore wind->H2
If you don't appreciate the important of green H2, just see how many gov't are eager to sign H2 deals with China.
I hadn't realize the extent to which renewable energy agreements were signed between China and Brazil
So I did a search and found this
Unbelievable stuff
Just in the state of Ceara:
Deal signed w/ Mingyang, SPIC, PowerChina, Envision, BOC & HW for renewables, green hydrogen & tech
check on the map where Forteleaza is, perfectly located to capture offshore wind and/solar and can easily ship green H2 to Portugal
Now go back to the top and see deal with Mingyang and SPIC finalized
Aside from just that 1 state:
SPIC w/ more renewable/H2 project at Rio
Develop HV DC transmission from hydro plant
ZTE to provide 5G to Brazil
ICBC/Banco do Brasil cooperation on financing climate change projects
JAC motors provide 280 electric trucks
5 COSCO ships to transport bio products (Brazil exports a lot of biodiesel)
So, huge cooperation bw China and Brazil in power sector, especially projects involved in energy transition. That's kind of what Saudis are getting from China also. Main diff being Saudis want solar->H2 and Brazilians want offshore wind->H2
If you don't appreciate the important of green H2, just see how many gov't are eager to sign H2 deals with China.