China Economy: News & Discussion

[rockdog]

Where do these subsidies come from? They come from people’s money in the banks… when the losses exceed an amount and are unrecoverable, that’s typically when withdrawals are frozen by the banks.

Do you have enough college education? Subsidies come from fiscal income, they are part of budget of central government, and need approved by our people's congress, not theirs money in bank.

EU and US all did subsidies by this way, Chinese government did the say way. You can insist your POV, i have no time to force you believe such common sense.

Adani is raising money from domestic and foreign investors. He doesn’t depend on the government to subsidize his growth through capital investment. His growth comes from preferential bidding, but that means that there is a need for that project, and completing the project means that it is profitable to do so.

The Congress has accused the government of pressuring the Indian Life Insurance Corporation (ILIC) to invest in the Adani Group, which has caused the value of ILIC's holdings in the conglomerate to fall by Rs. 52,000 crore since December 31, 2022.

Who forced LIC to take 'risky exposure' to Adani Group, asks Congress

The Congress has accused the government of pressuring the Indian Life Insurance Corporation (ILIC) to invest in the Adani Group, which has caused the value of ILIC's holdings in the conglomerate to fall by Rs. 52,000 crore since December 31, 2022. Congress general secretary Jairam Ramesh also...

economictimes.indiatimes.com

Unlike China, which has a growth engine built on artificially inflated capacity, which is not capital efficient. It’s like a big house of cards. China started to outsource this bad debt with the BRI and CPEC initiatives. This is what is causing all the bad defaults worldwide with all the companies that took the bait…. Sri Lanka, Pakistan, Nepal etc. that strategy has come to an end and essentially all the debt will come due. There is literally no difference between what China is doing and Enron / Subprime mortgage crisis which the US went through. Except in China’s case instead of just energy and housing, this type of shoddy financing instrument permeates the whole industry across all the sectors.

This is the "bad result" after the BRI, guess we are lossing money or making money?

 

[skywatcher]

Analysis without numbers is only an opinion

 

[srevster]

Do you have enough college education? Subsidies come from fiscal income, they are part of budget of central government, and need approved by our people's congress, not theirs money in bank.

EU and US all did subsidies by this way, Chinese government did the say way. You can insist your POV, i have no time to force you believe such common sense.




The Congress has accused the government of pressuring the Indian Life Insurance Corporation (ILIC) to invest in the Adani Group, which has caused the value of ILIC's holdings in the conglomerate to fall by Rs. 52,000 crore since December 31, 2022.

Who forced LIC to take 'risky exposure' to Adani Group, asks Congress

The Congress has accused the government of pressuring the Indian Life Insurance Corporation (ILIC) to invest in the Adani Group, which has caused the value of ILIC's holdings in the conglomerate to fall by Rs. 52,000 crore since December 31, 2022. Congress general secretary Jairam Ramesh also...

economictimes.indiatimes.com

This is the "bad result" after the BRI, guess we are lossing money or making money?

View attachment 195706

Tesla profit margin is 30% per car in China
NIO profit margin is -30% per car in China

NIO vehicle sales are growing as a function of market share. Common sense would say that it should focus on manufacturing efficiency before scale. But the government capital injection makes it a competitor to Tesla. This my friend is not free market capitalism, but crony capitalism. The funds to prop up NIO are not coming from institutional VCs but the government.

Year	Sales	Growth	Market Share
2017	0	0.00	0.00%
2018	8,101	0.00	0.03%
2019	20,946	158.56	0.10%
2020	43,728	108.77	0.22%
2021	91,429	109.09	0.43%

 

[KurtisBrian]

BYD tops 2022 sales chart as China's EV market slows · TechNode

BYD has had an iron grip on the market while smaller EV makers faced ups and downs.

technode.com

googled: is BYD profitable?

With sales of 1.86 million cars, it expects a net profit of 16-17 billion yuan ($2.37-$2.52 billion) versus 3 billion in 2021, an exchange filing showed.

Chinese EV giant BYD set for surge in 2022 profit as sales jump

China's BYD Co , the world's biggest seller of battery electric vehicles (BEVs) and plug-in hybrids, expects its 2022 net profit to be more than five times the amount it booked a year earlier, it said on Monday.

www.reuters.com

how does one make a profit if they are losing money on each car sold? Perhaps BYD is making money on each car sold.

 

[KurtisBrian]

View attachment 195706

Interesting choice of colors.
World turns red.
Global warming, temperatures increase. Droughts increase. Wild fires burning up the huge swathes of forest that the loggers don't cut down.

 

[AnantS]

That’s fine, but you don’t make payments before you get the house!

Umm in India its common to start payments even before your apartments are constructed. Thats why you have cases where people have paid money (via bank loan)to builder in full- an builder failed to provide home. Now thats not case in semi govt housing societies or boards- but they also start taking payments before possession. In bizarre cases owners had to shell money after they have completed transaction(more than 10 years) with development authorities as lower court to higher courts some how anounced enhanced payments to original land owners who sold to development authorities. That enhanced payment was passed on plot/apartment owners by development authorities. Consequently to investors who took loan to buy property are looking at a new amount which is making new cost almost double.

 

[rockdog]

Tesla profit margin is 30% per car in China
NIO profit margin is -30% per car in China

What you are going to prove? Tesla might be the biggest direct beneficiary from Chinese government.
The Shanghai government provided free land for factory, discount for bank loan, and direct subsidies to purchase, the aim is asking Tesla building the local supply chain, and stimulate the local brand. I don't see any problem here.

This already became a classic case study in MBA world wide, i don't think you are smarter than those MBA professors...

And when the local brands got stronger, the subsidiies will be stop, and force Tesla reduce the retail pricing. Chinese Telsa is almost lowset in the world.

Tesla, EV rivals absorb costs after China pulls plug on subsidy

China’s decision to end a more than decade-long subsidy for electric vehicle purchases has forced automakers, including Tesla , to deepen discounts to maintain sales as demand eases in the world's largest market.

www.reuters.com

Bloomberg - Are you a robot?

China's EV makers boost Dec sales as subsidy expires · TechNode

Chinese EV makers and Tesla’s operation in China are offering discounts and deals as government EV subsidies are due to come to an end in 2023

technode.com

Year	Sales	Growth	Market Share
2017	0	0.00	0.00%
2018	8,101	0.00	0.03%
2019	20,946	158.56	0.10%
2020	43,728	108.77	0.22%
2021	91,429	109.09	0.43%

NIO vehicle sales are growing as a function of market share. Common sense would say that it should focus on manufacturing efficiency before scale. But the government capital injection makes it a competitor to Tesla. This my friend is not free market capitalism, but crony capitalism. The funds to prop up NIO are not coming from institutional VCs but the government.

1. Nio also building 2000+ Battery Swap station in China and EU, it needs heavy investment but it made its brand different from other EVs, lossing money is strtegic. Just like Amazon lost money for its first 15 years for building warehosue and logistics over world.

2. Nio got investment from a city's investment fund, Hefei City Investment company. There are 1000+ city level vc, they are also competing each other, just like Temasek from Singapore, once the investment is successful, local officer get promoted, and factory will be built in the city to generate GDP, i don't see any problem here.

I had trial for Nio's latest ET5 and experieced swap station, it's pretty cool, i will choose Nio instead of Tesla. It stands for more high brand image and better services.

And i also invited to Voyah's new sedan, it's 50% expensive than Tesla Model 3.

 

[rockdog]

Interesting choice of colors.
World turns red.
Global warming, temperatures increase. Droughts increase. Wild fires burning up the huge swathes of forest that the loggers don't cut down.

Heard EU started to reopen coal based power plant. Who we need to blame?

BYD tops 2022 sales chart as China's EV market slows · TechNode

BYD has had an iron grip on the market while smaller EV makers faced ups and downs.

technode.com

View attachment 195772

googled: is BYD profitable?

With sales of 1.86 million cars, it expects a net profit of 16-17 billion yuan ($2.37-$2.52 billion) versus 3 billion in 2021, an exchange filing showed.

Chinese EV giant BYD set for surge in 2022 profit as sales jump

China's BYD Co , the world's biggest seller of battery electric vehicles (BEVs) and plug-in hybrids, expects its 2022 net profit to be more than five times the amount it booked a year earlier, it said on Monday.

www.reuters.com

how does one make a profit if they are losing money on each car sold? Perhaps BYD is making money on each car sold.

From my data source, BYD is profitable on each car, but not as much as Tesla. Plus, BYD has tegrated supply chain, they also make IGBT, battery inhouse, from 2023 they are selling them to other auto makers like Tesla, Toyota.

Toyota Teams up With BYD To Sell Electric Sedans in China

Toyota Motor Corp will team up with BYD to produce and sell a small electric vehicle in China by the end of the year, sources say.

www.asiafinancial.com

 

[srevster]

Point I’m trying to make is very simple. China is not a free market economy and capital deployment is incredibly inefficient. India on the other hand is very capital efficient:

it doesn’t enjoy the artificially accelerated growth China has, but it has a sustainable growth curve. The signs of that growth curve are starting to mature, while China is showing fractures with the meteoric rise in non performing assets from banks.

the next election will determine India’s trajectory for the next 25-30 years. China however does not have a rosy picture going forward.

 

[rockdog]

Point I’m trying to make is very simple. China is not a free market economy and capital deployment is incredibly inefficient. India on the other hand is very capital efficient:

it doesn’t enjoy the artificially accelerated growth China has, but it has a sustainable growth curve. The signs of that growth curve are starting to mature, while China is showing fractures with the meteoric rise in non performing assets from banks.

the next election will determine India’s trajectory for the next 25-30 years. China however does not have a rosy picture going forward.

Agree with him:

Analysis without numbers is only an opinionView attachment 195716

 

[srevster]

Agree with him:

China arrests hundreds in rural banking scandal

Police in China have arrested 234 suspects allegedly involved in a rural banking scandal, a month after hundreds of depositors protested over their lost savings in one of the largest demonstrations the country has seen since the pandemic began.

amp.cnn.com

A 1000 people protesting the freeze of their accounts. This type of stuff used to happens in India in the 80’s but it doesn’t happen anymore.

China being a more “advanced” economy seems like it is backwards it terms of building trust and keeping opaqueness in the corporate governance.

Subscribe to read | Financial Times

News, analysis and comment from the Financial Times, the worldʼs leading global business publication

www.ft.com

Regarding data;

your population on average is old. Your one child policy created the lowest birth rate in the world. This means there will be more older, non productive people dependent on a smaller productive population which is not incentivized to join the rat race. Think of his boomers and GenZ differ in the US. The boomer had a social contract with the government, if they put their head down and work; they reap the reward. Housing was affordable… that’s China from 1980-2009. But given the one child policy the macro economic conditions in China skipped a few generations, where as the new generation is not inCentivized to work in that way because the social contract is broken. Hence the lie flat movement is taking off.

regarding data:

india recently set a world record in road building; 25km in 18 hours;

mobile bandwidth cost:

 

[KurtisBrian]

oint I’m trying to make is very simple. China is not a free market economy and capital deployment is incredibly inefficient. India on the other hand is very capital efficient:

if India was most efficient then the free market would have been investing there. Free market chose to invest gobs into East Asians; Japan, South Korea then China. Those places must be MOST efficient or more efficient than alternatives. (edit)

 

[another_armchair]

https://edition.cnn.com/2023/03/06/business/mark-mobius-china-capital-controls/index.html

“I can’t get an explanation of why they’re doing this … They’re putting all kinds of barriers. They don’t say: No, you can’t get your money out. But they say: give us all the records from 20 years of how you made this money … This is crazy.”

^They did the same with many Chinese citizens having bank accounts in stressed banks.

Can't get my money out of China, India better investment option: Mobius

Mobius, who calls himself 'the Indiana Jones of Emerging Market investing', told FOX Business he's increasing exposure to alternative markets such as India and Brazil

www.business-standard.com

 

[rockdog]

https://edition.cnn.com/2023/03/06/business/mark-mobius-china-capital-controls/index.html

^They did the same with many Chinese citizens having bank accounts in stressed banks.

Can't get my money out of China, India better investment option: Mobius

Mobius, who calls himself 'the Indiana Jones of Emerging Market investing', told FOX Business he's increasing exposure to alternative markets such as India and Brazil

www.business-standard.com

More than 2,000 foreign companies chose to "run away", why did they lose interest in India?

https://inf.news/en/world/c17af197927f1387d2eb38b9459f61c7.html

 

[rockdog]

if India was most efficient then the free market would have been investing there. Free market chose to invest gobs into East Asians; Japan, South Korea then China. Those places must be MOST efficient or more efficient than alternatives. (edit)

Agree with you.

Dude, that's why i didn't want to waste time on debating with such kind of claim, if he didn't have economic education background. Something like that:

Point I’m trying to make is very simple. China is not a free market economy and capital deployment is incredibly inefficient. India on the other hand is very capital efficient:

@KurtisBrian

Theoretically, authoritarianism regimes have the best capital efficiency, just like current China and Japan, S.Korea, Taiwan during their military government era.

The national capitalism ensure the government invest money, will surely built things on time. Just like China's infrasctures like highway system, HSR system, Japan's auto industry, Korea's oligarch enterprises (Sumsumg/Hydai), Taiwan's IT/IC industries.

The problem is, national capitalism (non free market) couldn't cover all the sectors, that's why it needs mix or transformation to free market.

When the national capitalism finished the foundation, it ensures the per GDP surpassed 10,000USD; then the economic environment will be ready for free marketing transformation, this is typical East Asia model. So far, except western, this East Asia model is the only successful model, but there are never any good case study from subcontinent. That's the reason don't give a shit about @srevster opinion.

In our cyber, we thought India neither did well on national capitalism or free market. The India claim they were socialism and also had "5-year plan" from 1947, but they never built good infrasctures or good state owned companies, look at their weapon projects, 40 years long Arjun and Tejas, it became the laugh stock in our cyber. Can you imagine that, before Modi's GST policy, in 21st century, goods cross its internal states, they have to pay multiple times of tax? Is it a free market?

On the other hand, on free market, India didn't managed to raise enough good priate enterprises, there are no good product based companies, their TV & Mobile markets are totally occupited by Chinese companies, there are no big Internent companies.

So if in a class, if student A got 95 scores, student B got 85 scores, student C came to student B said: i got 55 scores but i have better learning skill, will student B need to care too much?

 

[KurtisBrian]

Theoretically, authoritarianism regimes have the best capital efficiency, just like current China and Japan, S.Korea, Taiwan during their military government era.

I don't believe it is authoritarianism that makes East Asia industry efficient. I believe it is the people, worker, societal cohesion and societal beliefs.
Japanese corporations were about cradle to grave loyalty.
Both Korea and Japan, you are a group. Your company group, your town group, your country group. Always working to support your group. Don't want to let your group down so work twice as hard. Less about oneself.
China/Chinese the same? I don't know.

 

[KurtisBrian]

In our cyber, we thought India neither did well on national capitalism or free market. The India claim they were socialism and also had "5-year plan" from 1947, but they never built good infrasctures or good state owned companies, look at their weapon projects, 40 years long Arjun and Tejas, it became the laugh stock in our cyber.

I am pretty certain India didn't make a big weapon industry or manufacturing industry because they were spending money buying stuff to try and prevent the economies of the debt based nations from collapsing. Same thing Chinese are trying to do now.

 

[another_armchair]

More than 2,000 foreign companies chose to "run away", why did they lose interest in India?

https://inf.news/en/world/c17af197927f1387d2eb38b9459f61c7.html

... because the Chinese owners offered them a similar/better deal in Vietnam circumventing Western 'sanctions'.

The same Chinese owners will set up factories in South America next if it suits both sides.

Don't BS us that Vietnam became an electronics manufacturing heavyweight a year after Trump started hammering China with sanctions & trade barriers.

 

[srevster]

if India was most efficient then the free market would have been investing there. Free market chose to invest gobs into East Asians; Japan, South Korea then China. Those places must be MOST efficient or more efficient than alternatives. (edit)

I didn’t say india is the most efficient. If you have reading comprehension; you could reread what I said. I said India is more capital efficient. For every dollar spent, the ROI is much better than China.

World Country Index Returns

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[srevster]

China’s 3Y return is -9.85%; 5y return is -7.84% and 10y is -0.84%

India’s 3Y return is 8.82%, 5y return is 4.27%, and 10y is 5.86%