Wealth come from production, not from selling over-inflated real estate/stocks to each other.
Chinese Economics Thread
- Thread starter Norfolk
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The total market capitalization of the Chinese domestic stock market hit a record high at the end of February by exceeding 116.8 Trillion Yuan, up 34% YoY. Sectors related to manufacturing, scientific research and technical services each saw their market capitalization rise by more than 40% compared with the same period last year. remember that doesn't include Hong Kong Stock market.
China minted 20 new Billionaires in recent times. thanks to Ai Boom and record IPOs in last 2 years.
who is saying china needs to curb production or sell over inflated real estate/stocks , what i am saying is that real estate does not appreciate/depreciate but stagnates so that over time it becomes cheaper relative to income reducing the portion of wealth a person must spend to purchase accommodation and china needing to consolidate producers in various sectors to create the world's most profitable firms and most attractive stock mkt , so that chinese people have a place to preserve and grow their wealth instead of that wealth being stored in bank for low yield , and stock mkt happens to be the best place for that as it is liquid , you can sell a portion of your gains for a vacation, upgrade home , etc directly increasing consumption and the amount of money spent as well as amount of physical goods + services purchased yoy
this is what needs to happen and happen at a larger scale , csi300 today crossed 5000 mark which is still below its all time high , more consolidation needs to happen for record multi year rally creating more billionaires than row combined every year
So every time a stock crash or real state crash comes the central bankers have to intervene and print money to only exacerbate the problem 10x or 100x, creating fake inflation, currency devaluations and inflated asset prices that push the middle class and young people out from owing homes or investing in reasonable valued companies and make the rich richer and the poor poorer. I have a great idea. Why we don't let markets I don't know be market again instead of the Central Banking pyramid scheme that we have today. Prices fall they fall and they go up they go up.
how is what ive proposed a central banking pyramid scheme ? consolidation across sectors is done based on reducing consumer side subsidies to goods made by the previously nascent industry , putting higher barriers to gain access of govt capital for producer side aid , culling weak firms and creating consolidated winners who have the best product , and then these winners get their capital from the public via pension funds , retail investors , etc , giving them lots of capital for future r&d , more lucrative compensation, giving local govt vcs their returns , and chinese people a place to grow their wealth instead of keeping it in bank deposits , allowing them to spend more on discretionary goods than the previous year , increasing standards of living
also i do not propose home price appreciation , depreciation or stagnation of prices over time makes homes affordable as incomes and wealth rise
New flash, that what is they do, weaker companies usually get out of the market more often than people think, I telling you because I have follow the semiconductor industry for quite some time but Chinese companies have develop a higher tolerance for lower margins as long they get market access, believe it or not the government is not picking winner or losers, with private companies often doing better than state companies.
yes , that is what i want to see too , across semiconductors , autos , food delivery , etc so that those stocks which have mkt share and solid fundamentals end up becoming the asset class for the chinese people to increase their wealth , with those gains driving consumption while price of needs decreases and spending on wants increases over time improving standards of living , rather than a us style stock mkt where betting firms have mkt cap of 10s of billions or hot firms are allowed to enter indices before price discovery risking working class people's money in a pyramid schemes
also having a great stock mkt is beneficial to china in geopolitical competition as chinese firms can list solely in china rather than dual listings to raise capital , nations that want to align geopolitically with china can invest in chinese mkts to reduce/eliminate their exposure to western mkts , a booming chinese stock mkt ends american exceptionalism theme in equity mkts , reducing the flow of money that goes to the us