FriedRiceNSpice
Captain
Unrealistic. More realistic scenario would be expecting 25% increase in productivity for a 1% raise.
Chinese Economics Thread
- Thread starter Norfolk
- Start date
This small series of tweet.
Chinese Central gov is unlikely to do major injections.
Rather, it be smaller and more targeted.
Unless, of course, some major global economic or geopolitic events happens in the near future.
Not to mention, it requires the involved players to put their longer term assets in collateral, to get money to invest into the stock market.
proelite
Junior Member
Looks like the people in charge and the good economists working for the government know what they are doing to some degree.
They don't know what they are doing. Not at all.
In fact, none of us really knows what we are doing.
All we really can do, is position ourselves to maximize our potential, and minimize our risks.
The stock market languishing like that, kind of meant the stock market could not allocate capital efficiently. The economy need risk capital. Banks may not lend to some start up.
But the problem with the stock market was that no one owned any stocks, compared to the property market. Therefore, to solve the stock market, they had to fix the property market, and the property market kind of like half political.
Now things seem to be lining up. It took a long time, and perhaps too long. Saw a chart claiming somewhere that the tech sector is almost as big as the property sector, which would suggest this transition is bearing fruit and will be a boom for the Chinese economy going forward.
That was the catch-22 here. The tech sector, needed capital, which would have come from the stock market, but that was depressed due to the property market, so it was difficult to finance the tech sector to overtake the property market, because property prices depressed stock prices.
But looks like there is a new push after this recent meeting, that more emphasis will be put into the stock market and start ups aka new listings, but that meant they had to do something about the property market, without going to far and getting themselves caught into that moral hazard thingy.
This was a very unique problem, probably never seen before in the history of economics/finance.
They did not know what they were doing. In the end, did not matter anyways. The CCP had faith in two things. One, is they would try to implement some policy to maintain stability. Two, they had faith in the market that it will be a force for good.
The Chinese communist are really different. It is very unique, and very interesting!
I mean, look, I think I read that somewhere here, that the Chinese communist were adamant that it was a priority to fix this, and have more new issues listed on the stock exchange.
Since when in the history of socialism are communist suppose to think like this!
Kind of funny, but really interesting at the same time.
One thing we can say about the Chinese, we not wearing some ideological straitjacket, unlike members of some government house somewhere else.
Haha! Hehe! Hee Haw!
Since when in the history of socialism are communist suppose to think like this!
Kind of funny, but really interesting at the same time.
One thing we can say about the Chinese, we not wearing some ideological straitjacket, unlike members of some government house somewhere else.
Haha! Hehe! Hee Haw!
The tech sector was provided with massive amounts capital by state owned banks (which got massive amounts of money from the property sector). They never needed the stock market. China literally dominates all new technologies unlike the US with biggest stock markets but not much to show from it. The reason it was hard for tech sector to overtake property sector was because China was rapidly urbanizing.
I have a different take, look at the timing of the news of the Chinese stimulus, it occurred around the same time as the Fed lowering rates. Seems like China is making it hard for the Americans by inducing capital to come to China rather than going into U.S. markets and debt, which the USG desperately needs as stagflation rears its ugly head.
China does not want the rmb to be too weak, so they had to wait for the yankees to lower interest rates first.