Politics China's Economy and Politics

[Chazman]

And here's the bottom line of the house of cards CCP economy..

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[primer]

Key tenant. Bailout. Its been working since 2008.(thanks future generations, don't worry...I'm ok but held hostage by a whole bunch of bankers, send money.)

 

[Ivan le Fou]

China Injects $18.6 Billion Into Banking System During Evergrande Crisis

China’s central bank increased its injection of short-term cash into the financial system after concern over a debt crisis at China Evergrande Group roiled global markets.

www.dailymaverick.co.za

 

[Picanha]

But they bailout only themselves not foreign investors I heard.

Evergrande Is China’s Economy in a Nutshell

China’s economic model has run out of road, and the process of putting it on a new track is likely to bring more Evergrande-like mistakes.

www.wsj.com

 

[colin traveller]

Mean while ............................

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[morris]

Quotes: China Evergrande nears interest payment deadline

China Evergrande Group will make it a top priority to help retail investors redeem their investment products sold by the indebted property giant, its chairman said, as uncertainty looms over interest payment due for a dollar bond on Thursday. "So in my opinion it signals they are closer to...

news.yahoo.com

Evergrande has entered into an agreement with lenders to pay off onshore bonds, which has eased lenders' fears of a possible default.

In addition, the People's Bank of China injected 90 billion yuan ($ 11.9 billion) into the banking system, demonstrating support for the Chinese markets.

 

[Ivan le Fou]

Beijing finds itself cornered by African countries as they cancel China-led projects

Beijing [China], September 21 (ANI): China is increasingly finding itself being cornered by African countries on investment-related matters with several of them cancelling their contracts with Chinese companies, according to a media report.

sg.news.yahoo.com

 

[morris]

Evergrande Debt Troubles: EV Unit Stops Paying Employees, Suppliers | Automotive industry news | Algulf

China's electric vehicle manufacturer Evegrande Group has failed to pay a number of employees and is behind in paying factory equipment suppliers, sources

algulf.net

 

[Ivan le Fou]

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[primer]

Miners move to third world places where the people already have power shortages?
Scenery of Ecuadorian army protecting coin rigs from the people who can't even use it to get a can of beans.

 

[BCNTM]

Miners move to third world places where the people already have power shortages?
Scenery of Ecuadorian army protecting coin rigs from the people who can't even use it to get a can of beans.

So you are telling me all those people coming across the English Channel are miners........ ?

 

[Ivan le Fou]

So you are telling me all those people coming across the English Channel are miners........ ?

Miners/minors.

 

[Flagg]

And here's the bottom line of the house of cards CCP economy..

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It’s important to inoculate oneself from only seeking confirmation bias to pre-existing beliefs.

Its worth remembering that while the US is capitalist and China is communist, China is leading the US in terms of cracking down on corporate excess.

While the primary reason for this is the continuity of Xi’s/CCP’s power, a secondary reason that strongly supports the primary reason is ensuring the continued delivery of the Chinese version of the American dream.

China will not hesitate to rein in excess: big fines on China’s Big Tech for anticompetitive behaviour, stopping for-profit online tutoring arms race for parents, imprisoning and executing folks for crimes of mass financial destruction.

CCP will likely take a few scalps with Evergrande crisis to satiate public demand for swift punishment.

While the moral hazard of pandering to Xi’s growing cult of personality is very real along with vast local/regional CCP corruption(particularly in lending), the same moral hazard is found in the US with insane levels of radioactive financial risk and toxic digital pollution with near zero consequences for those who can afford to pay the hefty retainers of lobbyists and political campaign donations.

 

[Chazman]

It’s important to inoculate oneself from only seeking confirmation bias to pre-existing beliefs.

Its worth remembering that while the US is capitalist and China is communist, China is leading the US in terms of cracking down on corporate excess.

While the primary reason for this is the continuity of Xi’s/CCP’s power, a secondary reason that strongly supports the primary reason is ensuring the continued delivery of the Chinese version of the American dream.

China will not hesitate to rein in excess: big fines on China’s Big Tech for anticompetitive behaviour, stopping for-profit online tutoring arms race for parents, imprisoning and executing folks for crimes of mass financial destruction.

CCP will likely take a few scalps with Evergrande crisis to satiate public demand for swift punishment.

While the moral hazard of pandering to Xi’s growing cult of personality is very real along with vast local/regional CCP corruption(particularly in lending), the same moral hazard is found in the US with insane levels of radioactive financial risk and toxic digital pollution with near zero consequences for those who can afford to pay the hefty retainers of lobbyists and political campaign donations.

Not just the the same. Let's call it a merger. Elite Merger.

 

[Flagg]

Not just the the same. Let's call it a merger. Elite Merger.

There certainly are powerful interests that transcend national borders preferring alignment, association, even partnership to promote their personal interests.

They existed during the Cold War and they exist today.

But they aren’t monolithic. And they don’t operate in a vacuum.

They rise and fall like governments. And while they are incredibly influential, that’s where it ends. Only sovereigns have ultimate control.

 

[Chazman]

There certainly are powerful interests that transcend national borders preferring alignment, association, even partnership to promote their personal interests.

They existed during the Cold War and they exist today.

But they aren’t monolithic. And they don’t operate in a vacuum.

They rise and fall like governments. And while they are incredibly influential, that’s where it ends. Only sovereigns have ultimate control.

I hope you are correct.

 

[Ivan le Fou]

Evergrande fallout could be worse than Lehman for China, warns Jim Chanos

Crisis at property developer ‘symptomatic’ of broader woes in world’s biggest emerging market, says short seller

www.ft.com

Evergrande is just a symptom of the underlying disease, a property, debt driven growth model which is at least 25% of China's GDP.

So far Wall Street and their pundits had been wrong on all fronts. And they kept on betting on China because they believed in special treatments.

“There’s lots of Evergrandes out there in China"

 

[Flagg]

Evergrande fallout could be worse than Lehman for China, warns Jim Chanos

Crisis at property developer ‘symptomatic’ of broader woes in world’s biggest emerging market, says short seller

www.ft.com

Evergrande is just a symptom of the underlying disease, a property, debt driven growth model which is at least 25% of China's GDP.

So far Wall Street and their pundits had been wrong on all fronts. And they kept on betting on China because they believed in special treatments.

“There’s lots of Evergrandes out there in China"

We know about the massive blatant IP theft, and that includes Huawei’s early days copying Cisco, until they found their own innovative feet.

We know about the absolutely ridiculous behaviour from Chinese government officials lying about western/Chinese joint ventures that go bad, pretend they never existed, and all IP is assigned to the Chinese company(Roush).

We know there’s a lot of bad lending shenanigans that involve local CCP bosses.

But the level of organic innovation Chinese companies are legit developing is considerable. Retail innovation at the global level is now almost exclusively Chinese led.

Physical product prototypes designed in the westand prototyped in China today that are worthwhile manufacturing will be copied ruthlessly tomorrow.

The same for Internet business model as found in the War of a Thousand Groupons.

1.4 billion people are one generation removed from being poor and run over by tanks(nationwide Tiananmen) or worse, being so poor that people were eating each other literally and figuratively(Great Leap Forward and Cultural Revolution respectively).

Yep. China has managed its way around a recession for over 40 years, the longest in human history.

They are probably going thru a technical recession right now.

But don’t underestimate the willingness of the Chinese people at the individual level to do whatever it takes to pull themselves out of poverty.

 

[Picanha]

But they are still very poor. The poverty threshold is very low. 1,90 $ per day.

The CCP dominanted market and its resulting distortions do not help to become very innovative and dynamic. Which is needed to lift out the rest from poverty (which they still are factually)

Its steered growth aided by massive subsidies. See Evergrande I suspect that a huge proportion of the Chinese economy is very close to a snowball scheme.

Just look at some public tenders where nobody of the competition knows how such low offers are possible.

The Chinese economy also profits enormous from not being treated abroad as restrictive as foreign companies are in China.

The plan is to subsidise everything until there is no more competition. Works only If you can subsidise it long enough until the competitors industry is closed for ever and all expertise lost.

But the market economy is much more flexible and if supported by a knowledge based culture can quickly innovate and outperform state actors. Aswell as fill lucrative supply - demand gaps.

 

[Ivan le Fou]

But they are still very poor. The poverty threshold is very low. 1,90 $ per day.

The CCP dominanted market and its resulting distortions do not help to become very innovative and dynamic. Which is needed to lift out the rest from poverty (which they still are factually)

Its steered growth aided by massive subsidies. See Evergrande I suspect that a huge proportion of the Chinese economy is very close to a snowball scheme.

Just look at some public tenders where nobody of the competition knows how such low offers are possible.

The Chinese economy also profits enormous from not being treated abroad as restrictive as foreign companies are in China.

The plan is to subsidise everything until there is no more competition. Works only If you can subsidise it long enough until the competitors industry is closed for ever and all expertise lost.

But the market economy is much more flexible and if supported by a knowledge based culture can quickly innovate and outperform state actors. Aswell as fill lucrative supply - demand gaps.

Labor is cheap, easily replaceable and "workplace safety" does not translate well.

Thus the poverty threshold can be low and salaries even lower.

The CCP dominating the market and the general culture/population, you end up with USSR style corruption and bureaucracy, with its load of incompetence and scams. COVID is the perfect example of such a "flawed" system, though "flawed" does not do justice to how poorly things are run.

Well... poorly... depends which side you are on, really. And it is almost we were shooting ourselves in both feet with these "subsidies", since not only the CCP is doing it, but we are also subsidizing China (and the CCP by extension).