China Economy: News & Discussion

RoaringTigerHiddenDragon

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In our context we should take a look at Chinas export numbers .. They can't fake that . Let's try to achieve at least 1/3rd of their exports.
In other news
Only Exports-imports adds to GDP and not just Exports. The trade surplus of China cannot explain the wasteful, ponzi gdp numbers. The CCP has forced the peasants to part with all their savings for investments into highly risky real estate Ponzi schemes. Look, the CCP goons are A grade liars and cheats - they listed fraud companies on NASDAQ, and cheat on taxes and contracts everywhere they operate including in India. Their entire consulate in Houston, USA was shut down due to stealing IP.
Tell me this: why are Chinese cities ranked at the same level as Indian cities in Mercer Quality of living index, if an average Chinese was so much well off as an average Indian?
In China, nothing belongs to the peasants. Everything belongs to the CCP - the peasant’s savings, social credit, organs, life, spending patterns, homes, land etc. The CCP can simply order banks to confiscate the peasants’ bank accounts like it is happening now and send tanks in to scare the protesting peasants away.
The reality is when we look at the median wages, which cannot be fudged, things become a lot clearer. Median wages in China are about 2-3X India’s wages, and that is the living standard difference. And this is also reflected in real gdp per capita ratio between the two countries. There is a reason 80-90% of the HSR lines in China are running at a massive loss as 90% of the peasants cannot afford these trains. These are all facts and cannot be fudged.
 

rockdog

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NEV sales in China hit record high

Sales of new energy vehicles in China reached a new record of 571,000 in June. Compared to May 2022, sales of these passenger cars (BEV, PHEV and FCEV cumulatively) increased by 150,000.


The previous best value of 505,000 New Energy Vehicles dates back to December 2021 – so the mark was clearly surpassed. The best month so far in 2022 was March with 455,000 units.





China: Plug-In Car Sales Climbed To Over 400,000 In May 2022

 

rockdog

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From thermal to solar units, China dominates India's power sector

Right after winning India’s largest solar cell manufacturing tender this month, Gautam Adani, chairman of Adani Enterprises, was reported to have said he would edge out Chinese solar products in 3-5 years. This would be an uphill task, given the fact that Chinese firms supply equipment for 78 per cent of India’s solar power project market.

 

rockdog

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In our context we should take a look at Chinas export numbers .. They can't fake that . Let's try to achieve at least 1/3rd of their exports.
In other news
Mobile phone, EV, Renewable energy are top 3 new sectors a developing nation would create advantages than those developed nations, which means tens of milions of jobs for young people with good pay.

So far, China is quite leading than India, that's why even Modi's "Make in India" have been there for 6 yrs, but the progress is quite limited. The current world only has one place of a industrilized nation with billion population class, China is the place holder. India is facing quite tough situation, your import/export will be affected by not joining the RCEP, as most of our manufactures need try to sell in developing nation first, like China did 20 yrs ago.
 

rockdog

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30-40% of your GDP comes from real estate. This is a very high ratio. Most developed nations have max 10% of the gdp in real estate. This means the CCP forcefully converted the savings of all peasants into real estate holdings, so much that buildings built without rebars in them and pretty much would be condemned to live anywhere else in the world are listed at $1 million. This is a giant Ponzi scheme where the peasants have been duped into thinking that real estate prices will always go up and even the shittiest apartment can always be unsold. The number of peasants living in unfinished apartments is in the millions now, as well. So about 70% of that 30-40% of gdp is a giant fraud played by the CCP. That is overall 20-30% of Chinese gdp is bogus and a fraud committed on the mindless peasants.
This is supported when you see the following:
- China is only 3X India’s ppp gdp
- the nighttime luminosity image shows Indian cities and towns are better electrified than China’s.
- adulterated food to keep costs low is very high in CCP land.
- skyscrapers are being torn down at a rapid pace demonstrating the wasteful gdp.
- the CCP cheating in the WB’s ease of business ranking by giving false data.
- party secretaries and their families/mistresses trying to flee China with their loot. Most rich people wanting to quit and invest overseas.
- the rich and productive of Hong Kong leaving in the hundreds of thousands
- paying a very small compensation to the peasants for flood damages
- eating anything that moves, indicating severe food scarcity due to toxic degradation of the environment.
- poorly designed subways and roads killing thousands of people during floods , as these were all built in a hurry by very corrupt CCP sponsored contractors. Sink holes on Chinese highways swallow entire trucks.

So, yeah China’s real gdp is closer to $10 trillion = about 3X India’s real gdp. The peasants are slowly finding out how their savings have been played with by faking a higher Ponzi gdp . So, they are coming after the party secretaries with pitchforks and ball busters.
China is $ 18 trillion economy, around 75-80% of USA, there are so many micro indication to support it. If only 3x than India, which means only a $9-10 trillion economy. But look a car selling data:


Mercedes-Benz, BMW and Audi all logged record-high sales by volume in the world's auto maker last year, a striking contrast to their significant declines in overall global sales. China's share of global sales jumped 5 to 6 percentage points at each company, to 36% at Mercedes, 33% at BMW and 43% at Audi.

Though China's relatively quick rebound from its initial coronavirus outbreak was a major factor, the country's impact is a trend that is likely here to stay, as automakers scramble to tap rising Chinese demand for both high-end and eco-friendly cars.

Mercedes -- a subsidiary of Daimler and the world's top luxury automaker -- sold more than 774,000 vehicles in China, up 12% from 2019, at the same time as European sales slumped 16%. BMW's Chinese sales climbed 7% to 777,000 vehicles, including its Mini marque, while Audi's rose 5% to 727,000.

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India Luxury Car Sales 2021 – Mercedes, BMW, Audi

https://www.rushlane.com/india-luxury-car-sales-2021-mercedes-bmw-audi-12423413.html .

luxury-car-sales-2021-india-mercedes-bmw-audi-2-696x657.jpg
 

another_armchair

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A total of 19 Chinese companies – 18 of them property developers – have defaulted in the offshore market so far this year, close to the whole-year total of 21 in 2021, according to Meng Ting, senior Asia credit strategist at ANZ Bank China.


For this year, she foresees a slightly higher default rate for both onshore bonds – rising to 2.2 per cent or 2.3 per cent from around 1.9 per cent – and in the offshore market, where she does yet have a specific projection.
Let's see where this ends up.
 

IndianHawk

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Chinese economy is utterly corrupt. With lots of bogus figures. There province have been caught faking economic output multiple times. And now they have massive unemployment.

COVID lockdown show that chinese vaccine was fake as well and didn't really worked.

Still they have a huge base and survive . But lots of misconceptions will be gone.
 

rockdog

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China now has the most companies on the Fortune 500 list


China flexes corporate muscles
China, including Hong Kong, had 136 companies on Fortune's largest companies list — the most of any nation. The U.S. ranked second, with 124, while Japan was third with 47. And for the first time in the history of the rankings, the aggregate revenue of listed companies based in Chinese-speaking countries surpassed that of U.S. companies on the list.

The total combined revenues of Fortune 500 companies rose 19% over last year to $37.8 trillion — the equivalent of more than one-third of global GDP. Cumulative profits were up 88% over last year, reaching a record $3.1 trillion. The listed companies have a total of nearly 70 million employees around the world.


E-commerce giant Amazon landed at No. 2 on the list, with Chinese-state owned electric company State Grid claiming the third spot. Tech company Apple ranked No.7, and pharmacy chain CVS Health ranked No.10. CVS Health was the only corporation in the top 10 with a female CEO, Karen Lynch.

Here are the top 10 companies on this year's Fortune 500 by revenue (see the complete rankings):

  1. Walmart (U.S.)
  2. Amazon (U.S.)
  3. State Grid (China)
  4. China National Petroleum (China)
  5. Sinopec Group (China)
  6. Saudi Aramco (Saudi Arabia)
  7. Apple (U.S.)
  8. Volkswagen (Germany)
  9. China State Construction Engineering (China)
  10. CVS Health (U.S.)
 

rockdog

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China’s Electric Car Exports More Than Double, Mostly to Europe

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China’s shipments of cars rebounded in May, with electric vehicle exports more than doubling, as Covid lockdowns gradually ended.

Car manufacturers in China shipped $1.2 billion worth of electric passenger vehicles, up 122% from a year earlier and almost triple the level in April, when car factories in Changchun and Shanghai such as those run by Telsa Inc were shuttered or barely open. Passenger cars worth $2.8 billion were exported, the fourth-highest monthly total in the past few years.

EV Recovery
China's exports of cars recovered in May on rebound in electric vehicles

Source: China's General Administration of Customs

With domestic sales falling for 11 of the past 12 months, car companies in China have boosted their sales overseas, with exports in just the first five months of this year exceeding the whole of 2020. The biggest market is Europe, which took nearly half of shipments in May and about three-quarters of electric car exports, with much of the rest going to Asia.

China’s current excess EV production capacity and low domestic sales mean it will continue to be a significant exporter in the medium term, according to Stephen Dyer, managing director at Shanghai-based consultancy AlixPartners. China made up almost 60% of global exports of electric vehicles in 2021 and the trend continues in 2022, although Tesla’s new factory in Europe may slow exports from China, he said.


Tesla shipped more than 22,000 cars overseas last month, after exporting only 60 in March and none in April, when it halted assembly due to the lockdown in Shanghai.
 

DEV1729

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That is why chinkies who’s empty tummies don’t get filled with empty skyscrapers and ghost towns end up in India to earn a living :rofl:.
Crynese beggars in india after chinese virus killed their employment
These 14 detained Chinese nationals worked in the mobile phone factories as low level iti workers.
 

Blademaster

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China is $ 18 trillion economy, around 75-80% of USA, there are so many micro indication to support it. If only 3x than India, which means only a $9-10 trillion economy. But look a car selling data:


Mercedes-Benz, BMW and Audi all logged record-high sales by volume in the world's auto maker last year, a striking contrast to their significant declines in overall global sales. China's share of global sales jumped 5 to 6 percentage points at each company, to 36% at Mercedes, 33% at BMW and 43% at Audi.

Though China's relatively quick rebound from its initial coronavirus outbreak was a major factor, the country's impact is a trend that is likely here to stay, as automakers scramble to tap rising Chinese demand for both high-end and eco-friendly cars.

Mercedes -- a subsidiary of Daimler and the world's top luxury automaker -- sold more than 774,000 vehicles in China, up 12% from 2019, at the same time as European sales slumped 16%. BMW's Chinese sales climbed 7% to 777,000 vehicles, including its Mini marque, while Audi's rose 5% to 727,000.

---------------------

India Luxury Car Sales 2021 – Mercedes, BMW, Audi

https://www.rushlane.com/india-luxury-car-sales-2021-mercedes-bmw-audi-12423413.html .

View attachment 165840
What is the import duty of China with respect to these luxury car items? Keep in mind that India has very high import duties against luxury cars. It acts as a deterrence to many buyers
 

rockdog

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What is the import duty of China with respect to these luxury car items? Keep in mind that India has very high import duties against luxury cars. It acts as a deterrence to many buyers
The import tax is 50% at average. Benz, BMW and Audi localized most their types, But their local average pricing are still more than USD50000.

So if you compare suck kind of purchase power between China & India, China is 6x GDP than India is quite reasonable.

Chinese luxury car market is slightly bigger than EU or USA, and chinese GDP is slightly bigger than EU and 75% of USA.
 
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Blademaster

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The import tax is 50% at average. Benz, BMW and Audi localized most their types, But their local average pricing are still more than USD50000.

So if you compare suck kind of purchase power between China & India, China is 6x GDP than India is quite reasonable.

Chinese luxury car market is slightly bigger than EU or USA, and chinese GDP is slightly bigger than EU and 75% of USA.
India's import duties against luxury cars is around 110%-130%. I am sure if the import duties were brought down to China's level, you would see a great deal more purchases of luxury cars.
 

another_armchair

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When investor demand for Chinese property debt was approaching its peak back in 2018, a banker could pull together the makings of a multi-million dollar deal during a Saturday boat trip around Hong Kong’s harbor and barely look up from her drink while doing it.

Now, the $203 billion market—which once yielded several deals a week and padded portfolios across the world from Pimco to UBS—is all but dead. And offshore investors are swallowing almost all of the losses.

Chinese property junk debt has been one of the most profitable and popular corporate bond trades of the past decade, built on the back of the nation’s economic growth engine and introduced to the world via Hong Kong. Since the first bonds emerged in 1997, institutions like Credit Suisse Group AG and Goldman Sachs Group Inc. have brought international money flooding into an asset class where rewards were formidable and defaults extremely rare. In an era of negative-yielding assets, these bonds became a critical way for many global fixed-income investors to bolster returns. Even major pension funds and insurers bought in.

“Hong Kong was a window for the world to access China’s high-yield credit and witness the golden era,” said Andy Chang, who was a private banker at a large global institution in the market’s 2018 heyday. He has now switched gears to become chief strategy officer for financial advisory Hermitage Capital.

Only one major private developer had ever skipped its debt payments. Until last year.

But a government clampdown on the debt-saddled real estate sector has squeezed access to new financing since late 2020. Stalled property projects have sparked protests, with frustrated homebuyers in more than 100 cities refusing to pay mortgages for unfinished apartments. And the long-held assumption that the country would bail out its property titans crumbled when China Evergrande Group—whose 2025 bond had been one of the most liquid and widely traded in the world—defaulted in December. Having once traded as high as 105 cents, it now changes hands at a paltry 7 cents.


Now, defaults are picking up pace, more than $100 billion in market value has been wiped out and Hong Kong’s bankers have no deals to arrange. Fidelity International Ltd.’s China high-yield fund has lost 37% so far this year and its assets have dwindled to $985 million, less than half their mid-2021 peak. Value Partners Group Ltd.’s fund has lost 32%. After months of insistence that the worst was over, stalwarts such as BlackRock Inc. and UBS Group AG are leading a sharp cut in exposure to property bonds. Fidelity, UBS, BlackRock and Value Partners all declined to comment.

Debt Binge
Chinese developer sales of offshore bonds topped $88 billion in 2019

Source: Bloomberg

Doubts about the financial health of some companies began simmering years earlier. Evergrande, the world’s most indebted developer, has spent much of the past decade lurching from one liquidity crisis to the next. But few imagined the Chinese Communist Party presiding over such a dramatic, sector-wide collapse.

“No one could have predicted this. If someone tells you they predicted this, they’re a genius or lying through their teeth,” said Desmond How, fixed income chief investment officer at Gaoteng Global Asset Management Ltd.

How cut his teeth trading Asia high-yield credit at Lehman Brothers Holdings Inc. before its bankruptcy during the global financial crisis. He’s not the only one. Some of the US investment bank’s alumni have been at the center of the high-yield market ever since Nomura Holdings Inc.—a major player in Chinese junk debt—bought the firm’s Asia-Pacific business in 2008. Benjamin Fuchs, the chief executive officer of BFAM Partners (Hong Kong) Ltd., Li Ran, chief investment officer of L&R Capital Ltd. and Edwin Wong, CEO of SSG Capital Management Ltd. are all Hong Kong-based former Lehman employees.

Some funds now face mounting redemptions as clients pull cash after steep losses. BFAM’s assets have shrunk by about a third in the past year to just over $3 billion, Bloomberg News reported. One of L&R Capital’s funds had slumped by 18.9% this year as of May 31, Reuters reported.

Deal Frenzy
Real estate has been a vital source of growth for China since the 1990s, when the government ended decades of restrictions on private sales. The sector accounts for about a fifth of the country’s gross domestic product, and home ownership has become a core aspiration for many Chinese families. In recent years prices have soared alongside speculative buying, with new homes pre-sold well ahead of construction.

At the high-yield market’s height, Chinese developers did four junk dollar bond deals a week on average—raising more than $83 billion across 230 notes in 2019 alone. Credit Suisse, Deutsche Bank AG, UBS and debt arranger units at China’s Haitong International Securities Group Ltd. and Guotai Junan International Holdings Ltd. dominated the scene for the nation’s borrowers, a tight-knit club with about 200 core members, according to two bankers who didn’t want to be named discussing details of their deal-making. Haitong and Guotai Junan did not respond to requests for comment, while Credit Suisse and Deutsche Bank declined to do so.

It wasn’t just global investors that wanted in. Before the market collapsed, deals were especially popular among developer tycoons and their friends and family. When Evergrande sold $6 billion of bonds in early 2020, billionaire founder Hui Ka Yan purchased $600 million himself. His poker buddy and fellow real estate magnate Joseph Lau has bought into nearly every effort by the property giant to raise cash in public markets.

This pattern was typical of high-profile developers, bankers say. Sometimes private bankers would learn of forthcoming bond sales from their own clients, who’d heard from their real estate pals before deal terms hit the market.

On a 2018 junk boat trip in Hong Kong that included private bankers and debt arrangers, one attendee recalled how word spread of a popular developer coming to market with initial deal terms the following week. Between glasses of champagne aboard the gleaming white yacht—an upgraded version of the wooden trading vessels that are an iconic symbol of Hong Kong—a private banker onboard texted a couple of high-net-worth clients to let them know of the prospective sale. Within the hour, he had received queries from two other clients who wanted in.

“At the time there was a craze, and everyone was trying to snatch up China high-yield credit,” said Hermitage Capital’s Chang. “It was a complete sellers’ market. The property developers had all the say and power.”

Chang described once taking a few minutes to check whether he could get a better price for a bond his client was interested in. He called his colleague, then got in the office elevator to visit him in person—and by the time he reached his workmate’s desk, the bond was sold out at the target price.

High-net-worth clients could easily double their assets on China junk bonds at that time, said Chang. Returns were about 50% from 2012 to 2015, and about 12% from 2018 to 2019. The asset class was so popular there was a premium in pricing of about 8%.

“I told clients that they would be basically sacrificing the first year of returns if they paid that much, but people were so crazy about it,” he said.

Hefty trading volumes were the norm, although the Chinese junk market was considerably smaller than its US counterpart. As a private banker, Chang saw one client put more than $70 million into bonds, including a significant proportion of junk debt from issuers such as Evergrande and Suning.com Co.

How said his biggest years were 2015 and 2016, when he was at Nomura trading $30 million to $40 million a day. “Those were good times,” he said.

Common Prosperity
Just a few years later, the industry’s food chain is falling apart.

The first inkling of change came in the second half of 2020. China’s “ three red lines” policy set leverage benchmarks that developers had to meet in order to borrow more money. Only a handful of developers were included at first but within months, it had claimed its first casualty.

Then in 2021, China introduced a centralized process for buying land in dozens of cities. Suddenly the plots for sale were bigger and firms had to pay up front. Only the largest developers could afford to replenish their land banks for future projects.

How and many others initially interpreted these reforms as the government’s way of ensuring the industry was sustainable. It wasn’t until he heard the slogan “common prosperity”—embodying President Xi Jinping’s unsparing campaign to narrow the nation’s persistent wealth gap—that How realized a crackdown was underway.


Role Reversal
Most China corporate defaults this year have been offshore notes

Source: Bloomberg
Notes: Figures are based on issued amount of notes with missed payments. Yearly totals are for January-June except in 2022, with that period through Aug. 8
For nearly two years, China’s developers have taken a battering that threatens to be an even greater drag on the nation’s economy than its zero-tolerance Covid-19 measures. Home sales for China’s top 100 developers have slumped for 12 months straight. Defaults hit a record last year that 2022 is expected to surpass, with high-profile failures at some of the nation’s biggest builders driving more than $25 billion of delinquencies since January.

And traders lulled into a sense of security by years of juicy rewards and virtually no defaults are suddenly reckoning with credit crisis after credit crisis. Yields are still at historic highs of more than 25% and returns have been negative for 11 months, the longest stretch on record.


One banker employed by one of the top five deal arrangers estimated that between 2018 and 2019 he worked on 200 to 250 deals a year. In January last year, he covered 20 deals in a single week. Business is now so slow, the banker said, that he has time to work out and pick up calls from friends.

Only one developer has sold a high-yield bond without any type of extra credit enhancement this year and dollar bond sales in Asia have fallen about 38% so far in 2022, compared to a year earlier.

“It is a complete collapse of confidence in both the physical and capital market, as well as in the developers, that led us to where we are today,” said Jenny Zeng, co-head of Asia Pacific fixed income at AllianceBernstein. Authorities need to restore confidence across the entire economy, she added.

Confidence Collapse
Nearly all the losses in debt markets have been heaped on international investors. That’s weighing on the financial complex that supports China’s overseas debt market.

Banks like Standard Chartered Plc and UBS have seen high-profile departures from their trading desks. Former star traders are bracing for years of merely trying to recover losses, with little prospect of the generous bonuses once on offer.

Many junk bond investors are based in Hong Kong, whose status as a gateway between mainland China and the rest of the world is already under pressure due to strict pandemic-control measures and a crackdown on political dissent. Global creditors are facing the realities of a market where hidden debt, backroom deals and poor governance are the norm and nasty surprises can wipe out the value of a bond in a matter of days.

Big Dealmakers
Top 10 arrangers of Chinese developer bond deals at peak of market

Source: Bloomberg
Note: Data based on deals arranged from Jan. 1 2017 to Dec. 31 2019

Even as the pool of survivors shrinks, investors remain vulnerable to sudden lapses in confidence.

While Evergrande triggered fears of an industry meltdown, it was a default in October by the much smaller Fantasia Holdings Group Co. that showed the rules of the game were being rewritten. The firm shocked investors by defaulting on dollar debt just days after repaying a private bond and only weeks after making assurances that it had sufficient working capital. Market watchers were left worrying that developers’ willingness to repay—rather than their capacity—would increasingly determine offshore investors’ fate.

And the pool of real estate companies at risk is still expanding, particularly as China’s stop-start Covid lockdowns persist. Government-backed firms were assumed to be immune until late June, when a partially state-owned developer announced a surprise extension on a bond that then fell more than 50% in less than a week.

At least $736 billion owed to creditors may still be at risk of restructuring or a haircut, Bloomberg Intelligence calculates.


Social Unrest
In July, a new crisis hit China’s real estate market as tens of thousands of people withheld mortgage payments on homes that developers, including Evergrande, have yet to complete. The first widespread social unrest since the start of the crackdown highlighted the growing frustration of ordinary Chinese homeowners who have poured their life savings into property. A “preliminary restructuring plan” that Evergrande has promised to deliver by the end of July has yet to appear.

Offshore bond holders are at the mercy of policy makers scrambling to quell dissent. China is weighing a plan to seize undeveloped land from distressed real estate companies, using it to help finance the completion of stalled residential projects. If approved, creditors stand to lose claims on some of developers’ most valuable assets.

For now, the days of heady debt-fueled expansion by private developers is over. The offshore real estate credit market is set to become dominated by state-run firms earning modest returns, under authorities that are quick to clamp down on speculation.

“While it’s the end of an era, it’s not the end,” Chang said. “This market will come back one day, albeit looking a lot different.”
 

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