Whats wrong with the Chinese Market? Somethings fishy.

[trackwhack]

All markets doesn't move in same way. It moves as per own fundamental and valuation. Chinese market didn't performed well in last 3 years due to 3 mainly reason 1> Expensive market 2> High Dependency on exports which was becoming not so profitable due to high input cost 3> FIIs were hesitated to invest due to lack of transparency backed with control by CPC.

Ok thanks.

 

[Galaxy]

Although, I am Anti-Chinese mostly on defence related things.

But I can't be biased on this topic because this is my profession to analyse market. I may not be 100% correct but i can say what i know. There are certainly many flaws in Chinese stock market but it will survive for few more years. Market will outperform in years to come but it's limited !!

Biggest problem is yet to come by end of this decade due to "Middle-Income trap" until Chinese makes 8-10 products like Samsung which is highly unlikely.

 

[mylegend]

Many Chinese company tries to overcome rising input cost such as labor cost by improving productivity. According to Boston Consulting Group, Chinese industrial productivity raise about 10% annually for last 10 years. However, Boston Consulting Group believe it is not enough to overcome the problem. Because country like United State already have higher productivity, many company choose China for lower labor cost, so they may not care as much for increased productivity in China. Below is reference of another post of mine that was completely ignored by all members in the forum.



Another thing worth mentioning, according to Boston Consulting Group's report Made in America, Again, "Although China accounted for 19.8 percent of Global manufacturing value added in 2010, the U.S. still accounted for 19.4 percent-a share that has decline only slightly over the past three decades."

The report also mentions that the annual increase of 10% productivity in China cannot compensate the pace of wage increases. See exhibit B in the report. I post a link of the report below, it is actually a very interesting research report. Search the wordproductivity in the PDF document, you will find the data I mentioned. This PDF does not allow copy and paste, so apparently they do not want me to copy and paste passages. So I will not copy the passage and reposted here.

You can read it yourself, very interesting article that indicate China is losing competitive advantage in manufacturing sectors.

However, does it make sense for a nation that have more than triple of the India industrial output to fail?

http://www.bcg.com/documents/file84471.pdf

 

[cir]

Why？

（1）Chinese markets are still over-valued
（2）Too highly priced IPOs，1 IPO a day on average， stocks selling on PEs of 50-100

Stocks often perform in the opposite direction of the general economy， especially so in China。 A fast-growing economy means higher interests， which means less liquidity for stock investment or speculation。 A high-growth economy also means that money can be put into more productive uses such as buying new plant and equipments， hiring more people etc。High interests also entice people to park their savings in bank deposit accounts， earning decent 5-6% annual returns rather than risking capital in an unpredictable stock market。 The US and european stock markets are doing relatively fine because interest rates in those countries are close to zero and will remain so till the 2nd half of 2013 according to the Fed. Stock investment，as least for the short term， is NOT profit driven。 It is liquidity-driven。

If anything，China is likely to understate its economy， and for 3 reasons：

（1）the service sector is mess。 People pay cash and get gifts in place of receipts。Revenues and taxes thus evaded lead to under-accounting of the size of the service sector
（2）Chinese are not like the ever-optimistic Indians， the former would not and has never used the name of a "shining China"ï¼Œwith the intention to staying a developing country in the eyes of the world for as long as possible
（3）China sees， for now at least， advantages in concealing its real strength， even just to deflect unwanted attention from other countries，in particular the US。

 

[ice berg]

Despite China posting the highest growth since the financial crisis, its still been the worst performer among major markets.

World markets peaked in Sep/Oct 2007. Then came the crisis when all markets tanked together. But they have recovered, somewhat. Except China. The Shanghai Index all time high is above 6000. Its trading today at sub 2200. Comparatively, Dow Jones peaked during the same time at 14K its trading today at above 11.5K. The FTSE peaked at 6700, again during the same period of Sep 2007, its trading today at 5050 levels. The Dax was at 7900, trading today at 7400. The Sensex was at 21K, trading today close to 16K.

The markets dont lie. CCP cannot mask the market. So whats really tying down the SSE Comp? Can some of the learned Chinese here give us your views. (Nimo Cn and Ice berg, kindly excuse). I'm asking for an honest opinion and not propaganda. Many of us have money parked in the markets. I have a very uneasy feeling about the weakness in the Chinese markets.

It all depends on what time frame you are using.

Any kind measurement need a time frame. Why using the 2007-2011 chart?

You get a screwed picture when you using this chart.

For instance what happends when you go further back on time, say 5 or 10 years back in time? How will the chart look like? A chart can tell different stories during different time periods.

As to your question, it is simple. The Chinese stock market is a big bubble in many ways. Because limited way of investing money, it attracts lots of "hot money". It means that when it goes up, it can climb high. But when it went down, it can also fall further than what you expect. You see how much it went down. Study the chart good and you will see the growth prior to the collapse. Too much speculation is the key here. There is no cure for greed.

Not sure what you meant by masking the market. Stock exchange is seen as speculation. How many people measure chinese economy based on stock exchanges?!?

 

[trackwhack]

It all depends on what time frame you are using.

Any kind measurement need a time frame. Why using the 2007-2011 chart?

You get a screwed picture when you using this chart.

For instance what happends when you go further back on time, say 5 or 10 years back in time? How will the chart look like? A chart can tell different stories during different time periods.

This is the reason I asked you to stay out with your nonsense. The point of reference I took was the peak when all markets around the world were on all time highs.

 

[ice berg]

This is the reason I asked you to stay out with your nonsense. The point of reference I took was the peak when all markets around the world were on all time highs.

And I already told you it is nonsense to pick a peak period to make a point. That is like picking a peak year to show how investment in stocks can be better than placing money in a bank.

Obviously you have no idea how stock market works. Have fun with your thread.

 

[trackwhack]

And I already told you it is nonsense to pick a peak period to make a point. That is like picking a peak year to show how investment in stocks can be better than placing money in a bank.

Obviously you have no idea how stock market works. Have fun with your thread.

No it is not non-sense you dud, if I as an Investor chose to park my money on Index stocks worldwide in Sep 2007, 60% of my initial invested capital of what I put into Shanghai would have been wiped off. Get an education. I'm not responding to your baits anymore. You were clearly uninvited to start with. There are others who have given their opinion that is not half arsed and skewed.

 

[ice berg]

No it is not non-sense you dud, if I as an Investor chose to park my money on Index stocks worldwide in Sep 2007, 60% of my initial invested capital of what I put into Shanghai would have been wiped off. Get an education. I'm not responding to your baits anymore. You were clearly uninvited to start with. There are others who have given their opinion that is not half arsed and skewed.

Some people need to think before they post something. You are missing my point here.
What kind results you get is entirely based on what time frame you are using. When you only pick the time period between a bull and bear market you get a skrewed picture of stock index. If you dont get that, then you are the one who need education here.


BTW kid, I worked as investment advisor in a bank. Try not to make a fool out of yourself with your half baked knowledge of stock markets.

 

[Armand2REP]

This is not retail property, it is commercial property for office. There is cloths because it seems like it was occupy by fashion or textile companies(my family's business is in the industry, that why I know).

Some company have multiple brands, some factories with designing capability have multiple display rooms to fit different client needs. so that why they have more than one display room... One or a few company can do the effect you just seen on the video.

This is what it used to be...


This is now...

 

[Daredevil]

Trackwhack,

I think another way to convince the Chini is to plot growth rates vs stock market index values each year/quarter. If growth rates doesn't decrease but the stock market indices decrease then there is something wrong either with growth rates or stock markets

 

[Ray]

I agree. Wage have indeed more than doubled in recent years, my family company adjust to currency issue by focusing on domestic market.

The wage were never higher than 2000 few years back, but now they are close to 3000 in Guangdong. Also, since my family's business set to become public and we can not hide away from most of regulation. For instance, we were require to pay 2/3 of all 社保(social security) for every single workers(include all factory workers). The 2/3 of 社保 is about 300 rmb， workers also need to pay for 1/3 that is 150. However, because the Chinese social security system is provincial or municipal base, so labor for other province refuse to pay, because they know they will be bond to the Guangdong province if they still want to get their shares of medical benefit and retirement benefit. After all, we decide to pay for full shares 1/1 of 社保 for all workers to settle the issue.

Chinese government proudly claiming they are close to the goal 100% social security and medical insurance coverage（currently they reach 90% level) for all chinese. But sadly, the government pays nothing to the system, it the private companies and workers that bears the cost.
Below links are information about 90% medical coverage.
中国医保参保人数12.8亿 医保覆盖率超9成_中国_环球网中国医保参保人数12.8亿 医保覆盖率超9成_新闻_腾讯网

I thought the Hokuo system was in place.

Is that been abolished?

 

[trackwhack]

Some people need to think before they post something. You are missing my point here.
What kind results you get is entirely based on what time frame you are using. When you only pick the time period between a bull and bear market you get a skrewed picture of stock index. If you dont get that, then you are the one who need education here.


BTW kid, I worked as investment advisor in a bank. Try not to make a fool out of yourself with your half baked knowledge of stock markets.

I noticed the tense there, the bank probably kicked you out I suppose. I picked the same time period for all the indexes. All I said was between (like you state) the bull and the bear period, every other index lost 10 - 20% while the SSE Composite lost 60%. If you cannot explain, dont rant, give up and go fishing somewhere else.

DD, I knew this monkey would come in and type a load of trash which is why in the original post I requested him to stay out. What more can I do?

 

[ice berg]

Trackwhack,

I think another way to convince the Chini is to plot growth rates vs stock market index values each year/quarter. If growth rates doesn't decrease but the stock market indices decrease then there is something wrong either with growth rates or stock markets

Following that logic then it is indeed fishy that when the shanghai index lost 60 percent of its peak value, the economy still expands.
For people who are trully interested in the correlation of stock market and economical growth in different markets:
http://faculty.washington.edu/karyiu/confer/beijing06/papers/men-li.pdf
Knowledge speaks , wisdom listens.

 

[ice berg]

I noticed the tense there, the bank probably kicked you out I suppose. I picked the same time period for all the indexes. All I said was between (like you state) the bull and the bear period, every other index lost 10 - 20% while the SSE Composite lost 60%. If you cannot explain, dont rant, give up and go fishing somewhere else.

DD, I knew this monkey would come in and type a load of trash which is why in the original post I requested him to stay out. What more can I do?

Maybe every time you change your work is because you got fired. That may not be true for others. I can assure you of that. That is assuming you got a job at all. Based on the fact that you can only resort to name calling when you cant debate properly...I am not so sure of that.

 

[trackwhack]

Following that logic then it is indeed fishy that when the shanghai index lost 60 percent of its peak value, the economy still expands.
For people who are trully interested in the correlation of stock market and economical growth in different markets:
http://faculty.washington.edu/karyiu/confer/beijing06/papers/men-li.pdf
Knowledge speaks , wisdom listens.

There you go proving you are an idiot again. You realize that the paper you quoted is 6 years old right? It predates the data we put in. None of your empirical relationships hold when markets witness what it did in 2008. Also as a statistician, it is very easy to fit data into graphs, not so easy to build accurate prediction models. You need balls of steel and have to be willing to put your reputation at stake.

You are a class A dolt if there was any. And I know that because you fall into the category of "Jack of all trades, master of none". There is not a topic you are vehemently opinionated about and 9 out of 10 times, your opinions are trash.

 

[ice berg]

There you go proving you are an idiot again. You realize that the paper you quoted is 6 years old right? It predates the data we put in. None of your empirical relationships hold when markets witness what it did in 2008. Also as a statistician, it is very easy to fit data into graphs, not so easy to build accurate prediction models. You need balls of steel and have to be willing to put your reputation at stake.

You are a class A dolt if there was any. And I know that because you fall into the category of "Jack of all trades, master of none". There is not a topic you are vehemently opinionated about and 9 out of 10 times, your opinions are trash.

Are you saying that every 6 years they have to post a new article just to suit you? The basics are the same.
1+1= 2. We dont need to update this every 6 years to suit your view of how the world works.
My last post in this thread. Obviously you didnt get anything out of that article or the references.
Sigh, ignorance is a bliss.:thumb:

 

[trackwhack]

Are you saying that every 6 years they have to post a new article just to suit you? The basics are the same.
1+1= 2. We dont need to update this every 6 years to suit your view of how the world works.
My last post in this thread. Obviously you didnt get anything out of that article or the references.
Sigh, ignorance is a bliss.:thumb:

Did you even read the article you posted. It runs analysis of economic growth and market growth from 2000 to 2006. High positive correlation. Since 2007, your economic growth has remained the same or higher, while the stock market has gone south. High negative correlation. Like I said, Class A dolt.

 

[Daredevil]

Here is a quick and dirty chart on correlation between Chinese growth rates and stock market indices.

If one sees 2010 period, there is >10% growth rate but stock market is still down. This is what Trachwhack is taking about I guess. Also need to look at 2011 data once they come out. That will be more clinching evidence to what Trackwhack is alluding to.

 

[trackwhack]

Assume 2011 data at 9.2% growth, Stock market ended at 2190. Also the more accurate correlation would be absolute GDP to absolute index rather than % change in GDP to absolute index. But I did notice that you mentioned quick and dirty