Resource War/Financial Woes

AssassinsMace said:

The average Chinese kept on spending. Why? Because the Chinese stock market has nothing to do with them.

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Well according to post 37 By Autumn Child whose family and friends play the Chinese Stockmarket, hes of the opinion, over 50% participation is done by private individuals.
BUt the most important part isthe fact that WEstern Sources suggest China only has about 60million people who have the financial resources to consume to the same standard of their Western Counterpart. By that I guess they mean the more upmarket higher tech stuff. Well even if we increased that number to 100million people, and they are mostly to be from the group that play the stock market, if they take a hit, they are most likely to keep their wallets closed as they recover.

The outcome of which is that China is only supplying lower priced /Tech items to the masses, which is hardly going to help it in its expressed desire to move up the value chain in its products.

bladerunner said:

Well according to post 37 By Autumn Child whose family and friends play the Chinese Stockmarket, hes of the opinion, over 50% participation is done by private individuals.
BUt the most important part isthe fact that WEstern Sources suggest China only has about 60million people who have the financial resources to consume to the same standard of their Western Counterpart. By that I guess they mean the more upmarket higher tech stuff. Well even if we increased that number to 100million people, and they are mostly to be from the group that play the stock market, if they take a hit, they are most likely to keep their wallets closed as they recover.

The outcome of which is that China is only supplying lower priced /Tech items to the masses, which is hardly going to help it in its expressed desire to move up the value chain in its products.

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And what happened when the Chinese stock market collapse last year because stocks were over-valued? Certainly nothing of the dire scenarios you pointed out you say will happen. Bad example. You aren't Gordan Chang are you? The same Western sources that say the vast majority of the Chinese public can't buy a car? The same Western sources that said China would collapse for this and that and then didn't? Everything you've pointed to has already happened and still none of the dire predictions have come true. You point out things that belittle what's going on in China that makes it fragile and yet every scenario you say will cause China to collapse has already happened with no collapse.

IN Short they havent started yet so isnt it early days to suggest they can't seriously undermine whatever markets they want to?

You are going on about the collapse of the stock market, I merely posted an article on how Chanos and Co have said on how they were going to short the Chinese market. So apart from pointing out several things that could be in their favour ( Such as the lack of transperency in the banking sector with their bad loans) and what might happen should they go ahead with the plan I never predicted anything about any coming collapse.


I repeat The major aspect you are overlooking when repeatingly stating that despite countless bodies predicting the immininent financal collapse of China's share market,or whatever, hasnt happened, is because, to date there hasn't been any peoples with close to a trillion dollars in asset backing prepared to try to short the market even if the regulations allowed them to attempt it..

Question. If Chanos actions cause the govt to divert financial resources to counter,or suspend any intention of reforming the regulations as regards financial transactions
arent they in effect undermining the economy.?


Chinas car market is booming , however it has had its ups and downs at the start of the crisis and only really picking up with the stimulus.

The amount of times of heard people say Chinas reserves will help it through the trying times, I figure its been spent twice over and once spent, whats left, if one considers the possibility of falling trade surpluses.

eg

provides a insight to China increasing market share but at a lesser price for its goods

....The buyers are getting more and more tough in bargaining for lower prices, especially American buyers,” says Liao Yuan......

I also remember reading in the Peoples Daily a report that Chinas current-account surplus has almost halved to around 6% of GDP from 11% in 2007.

By the way Chinas reserves stood at about 2Trillion when it announced its Stimulus package, Now take 300 billion out for underrighting that and another several hundred billion for its social safety net package for the rural community/ another several hundred for its banks bad loans and another 800bil in american stocks, it in effect doest have 2trillion left to play with.????

OK according to this piece, it is not possible to short mainland china stocks, as i suspected already.

Chinas stock market is not so "sophisticated" as like Wallstreet, where you can short everything.

Even if Chanos gear up to bring doom to China the effect may very very small because they do not have the instruments to do so

GermanChinese said:

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OK according to this piece, it is not possible to short mainland china stocks, as i suspected already.

Chinas stock market is not so "sophisticated" as like Wallstreet, where you can short everything.

Even if Chanos gear up to bring doom to China the effect may very very small because they do not have the instruments to do so

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Brilliant thats the very answer I was looking for and no one else was able to point that out.If you note in my above post i had already expressed doubt as to whether the regulations allowed it.
I also thought foreigners were only allowed to buy a certain class of share.
I personally think that the arguement that i major setback cant happen to China because if for no other reason than it hasnt happened in the past is a blinkered view as circumstances are always changing as China progresses.

bladerunner said:

IN Short they havent started yet so isnt it early days to suggest they can't seriously undermine whatever markets they want to?

You are going on about the collapse of the stock market, I merely posted an article on how Chanos and Co have said on how they were going to short the Chinese market. So apart from pointing out several things that could be in their favour ( Such as the lack of transperency in the banking sector with their bad loans) and what might happen should they go ahead with the plan I never predicted anything about any coming collapse.


I repeat The major aspect you are overlooking when repeatingly stating that despite countless bodies predicting the immininent financal collapse of China's share market,or whatever, hasnt happened, is because, to date there hasn't been any peoples with close to a trillion dollars in asset backing prepared to try to short the market even if the regulations allowed them to attempt it..

Question. If Chanos actions cause the govt to divert financial resources to counter,or suspend any intention of reforming the regulations as regards financial transactions
arent they in effect undermining the economy.?


Chinas car market is booming , however it has had its ups and downs at the start of the crisis and only really picking up with the stimulus.

The amount of times of heard people say Chinas reserves will help it through the trying times, I figure its been spent twice over and once spent, whats left, if one considers the possibility of falling trade surpluses.

eg

Please, Log in or Register to view URLs content!

provides a insight to China increasing market share but at a lesser price for its goods

....The buyers are getting more and more tough in bargaining for lower prices, especially American buyers,” says Liao Yuan......

I also remember reading in the Peoples Daily a report that Chinas current-account surplus has almost halved to around 6% of GDP from 11% in 2007.

By the way Chinas reserves stood at about 2Trillion when it announced its Stimulus package, Now take 300 billion out for underrighting that and another several hundred billion for its social safety net package for the rural community/ another several hundred for its banks bad loans and another 800bil in american stocks, it in effect doest have 2trillion left to play with.????

Click to expand...

And where's the collapse as predicted? You point out a lot of things that have happened and yet we haven't seen that collapse because China is so fragile.

In one way or another I don't think China will collapse in the broad sense..

AssassinsMace said:

And where's the collapse as predicted? You point out a lot of things that have happened and yet we haven't seen that collapse because China is so fragile.

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I think your logic is flawed in suggesting that China won't suffer a economic setback based on the failure of past predictions to eventuate. BUt ask yourself was it luck or good management that China escaped the worst of the recent financial meltdown or it happened when it did. If this meltdown was to have happened a few yrs later Chinese banks might well have been involved in the sub prime mess as it looked look for investments that provided a better return than US bonds etc.. Also keep in mind China's Sovereign fund has had a less than auspicious start. loosing more than a third of its net worth in under a year.
Also tthe Climbing oil prices of $150 plus and climbing was having an effect on the thinking of the China affect when it came to outsourcing.
I only suggested things that might happen if unfriendly identities were able to short the chinese market, but seeing its been established that Unless China changes the way the current stock market functions, it's unlikely to happen.
I do however think the chinese economy will experience setbacks from time to time, but nothing like a total collapse. However its rather interesting that you attach little importance to the stock market. I do because it's the worlds second biggest by value and at $3.21 Trillion, theres a lot of mom and pops money in there.




(Bloomberg) -- China overtook Japan as the world’s second-largest stock market by value for the first time in 18 months, after government stimulus spending and record bank lending boosted share prices this year. The Shanghai Composite Index rose 1.4 percent yesterday, sending the value of China’s domestic stock market to $3.21 trillion, compared with Japan’s $3.20 trillion, according to data compiled by Bloomberg. ...........

Note how Blomberg states that bank lending has boosted the share price, But what if the price drops and the people who borrowed it cant pay the bank back?
As Autumn Child pointed out the last time the shares dropped , most of the money was cash not borrowed, this time Bloomberg is claiming a large portion is borrowed.
Wen has also commented on this fact and has stated it to be a cause for concern that borrowed money was being used for the wrong purposes.

IT might be only a fleabite in the over all scheme of things but if the govt has to recapatilise the banks, its then using money that could be easily spent in other areas that need urgent attention

bladerunner said:

I think your logic is flawed in suggesting that China won't suffer a economic setback based on the failure of past predictions to eventuate. BUt ask yourself was it luck or good management that China escaped the worst of the recent financial meltdown or it happened when it did. If this meltdown was to have happened a few yrs later Chinese banks might well have been involved in the sub prime mess as it looked look for investments that provided a better return than US bonds etc.. Also keep in mind China's Sovereign fund has had a less than auspicious start. loosing more than a third of its net worth in under a year.
Also tthe Climbing oil prices of $150 plus and climbing was having an effect on the thinking of the China affect when it came to outsourcing.
I only suggested things that might happen if unfriendly identities were able to short the chinese market, but seeing its been established that Unless China changes the way the current stock market functions, it's unlikely to happen.
I do however think the chinese economy will experience setbacks from time to time, but nothing like a total collapse. However its rather interesting that you attach little importance to the stock market. I do because it's the worlds second biggest by value and at $3.21 Trillion, theres a lot of mom and pops money in there.

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(Bloomberg) -- China overtook Japan as the world’s second-largest stock market by value for the first time in 18 months, after government stimulus spending and record bank lending boosted share prices this year. The Shanghai Composite Index rose 1.4 percent yesterday, sending the value of China’s domestic stock market to $3.21 trillion, compared with Japan’s $3.20 trillion, according to data compiled by Bloomberg. ...........

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buddy, there is a HUGE difference between a setback and a total collapse. the recession in the US right now is NOT a collapse. Japan's lost decade cant even be called a collapse. if you ask whether or not China will experience setbacks in the future, answer is not only they will, they have experienced setbacks before. check the data of China's economic growth in 89 and 90 after the Tiananmen incident. later on in 98 there was also a time when China couldnt meet its 8% growth rate target, which got Premier Zhu Rongji into a lot of trouble. look at the history of all industrial countries in the world, they have all experienced some sort of setbacks throughout their period of expansion. i would say at some point within the next 30 years China is almost guaranteed to experience major social unrest or economic setbacks or both, but that does not mean China will stop growing, its just a necessary step for a country to mature. the predictions of China will surpass the US still holds true. if you are talkin about a total collapse, at least i dont see any evidence of that being imminent at this point.

pla101prc said:

buddy, there is a HUGE difference between a setback and a total collapse. the recession in the US right now is NOT a collapse. Japan's lost decade cant even be called a collapse. if you ask whether or not China will experience setbacks in the future, answer is not only they will, they have experienced setbacks before. check the data of China's economic growth in 89 and 90 after the Tiananmen incident. later on in 98 there was also a time when China couldnt meet its 8% growth rate target, which got Premier Zhu Rongji into a lot of trouble. look at the history of all industrial countries in the world, they have all experienced some sort of setbacks throughout their period of expansion. i would say at some point within the next 30 years China is almost guaranteed to experience major social unrest or economic setbacks or both, but that does not mean China will stop growing, its just a necessary step for a country to mature. the predictions of China will surpass the US still holds true. if you are talkin about a total collapse, at least i dont see any evidence of that being imminent at this point.

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IF YOU ARE UNDER THE IMPRESSION THAT I SAID CHINA WILL HAVE A TOTAL COLLAPSE, I NEVER SAID THAT AT ALL.(Just reall all my posts on this thread) However it seems to be quite common to associate a serious setback with a collapse which i think is fair enough but I think some people are confusing a collapse with total collapse> what Im alluding to is what you have just posted in a very well expressed manner.

THe last few posts have been a response to Chanos claim that he was capable of shorting the Chinese Market, but all that is now hypothetical as it is impossible for to take a position in the chinese market to achieve his goal.