A more correct headline:
How China has 'throttled' its VULTURE CAPITAL FINANCED private sector.
Not to mention, IT JUZI numbers are 'problematic' in the first place (and also not completely up to date).
(Look up some threads glennluk did on IT JUZI)
Chinese Economics Thread
- Thread starter Norfolk
- Start date
How China has 'throttled' its VULTURE CAPITAL FINANCED private sector.
Not to mention, IT JUZI numbers are 'problematic' in the first place (and also not completely up to date).
(Look up some threads glennluk did on IT JUZI)
I just want to thank all those George soros types who got margin called on their shorts against SMIC. If this keeps up, I might be able to use the profit proceeds to become a landlord in America and bully the tenants until they accept Maoist communism.
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The problem with Chinese startups is that they were behaving like American startups, meaning grow first make money later. There were a lot of very questionable things happening like in the space of bike sharing and food delivery that doesn't add much value to the economy and because of the high competitive environment they had to drop prices to rock bottom in order to compete. So they were also losing money as well. So the gov stepped in and put a end to these practises throught new regulations. And it did put a end to those types of "food fights". But the problem is that the good high tech startups became collateral damage in the process.
The government is aware of this situation and is now taking measures trying to rectify this.
HK down 5% already
Conference has been a flop so far. Probably better to wait for the Ministry of Finance to see any actually strong fiscal stimulus
Conference has been a flop so far. Probably better to wait for the Ministry of Finance to see any actually strong fiscal stimulus
Unironically not necessarily a good thing.
I expect correction to occur in the short to medium term
I get your theory on why you don't think the stock market is productive, but I think it is necessary for China right now. China already limited the growth of real estate prices, Chinese money have to go somewhere domestically, they can't all buy government bonds (already ultra low yields), gold or stakes in private tech companies (which requires a substantial chunk of cash).
For the past few years most Chinese casual investors are forced to put some of their money in foreign products like bonds and stocks. If China wants to de-dollarize, building a whole financial system is a must, this includes a healthy stock market. The previous stock market was seriously unhealthy imo.
This twitter guy is just peddling FUD, selling wild expectations then shorting the market when they don't meet them. The Chinese stock market already grew 27% in the past 2 weeks.
I'm not inherently against the stock market in a regulated and mature market environment, however the Chinese stock market remains a glorified gambling den.
That's why surging 10% in a single day (or any sort of significant amount in X period of time) isn't worth particular celebration or astonishment.
Chances are that upwards trend will see a correction in time.
(Unless your post is meant to be demonstrating concern that it is rising so much in a single day, in which case that's reasonable)
I mean that's also ok though, western stock market is also pretty much gambling, especially if you use leverage, or play with options. How else are Chinese people going to gamble? Lottery is boring, casinos and horse racing are far away, currency/commodity trading is too risky, and cryptocurrencies are kinda illegal. The Chinese stock market is a actually pretty good gambling den, it's very hard to lose everything, especially since the government has unlimited ammo to save the market when it gets too low.
Gambling is human nature, it shouldn't be encouraged, but I think there is no reason to look down on it. In a sense, VCs are just glorified gamblers.
Let's put it this way, I'm not inherently against the idea of a healthy stock market, however I do not believe the Chinese stock market can be described as healthy. If you do also view the Chinese stock market as a form of gambling (particularly relative to more established, mature markets dominated more by institutional investors rather than retail investors), then it either means you see that as being healthy, or you recognize that the current stock market is not healthy and thus significant rises or "popping off" is not desirable and will end up seeing corrections which will see some people inevitably holding the bag.