China has done a better job of reducing corporates ability to raise prices. So rising wages eats into profits and creates a weak stockmarket. Not true in US
The main issue at hand in the PRC is the struggle between local governments and the central government and the bad debts and how they're going to be restructured.
I'm in the camp of PRC property prices going up is over, people forgot about made in china 2025. The property market in my opinion is just a mess the central government is trying to clean up and just in damage control, you have to be delusional if you think the property market will keep going up like in the last 20 years. The main reason the politburo hasn't just let the whole RE industry go is because of employment and jobs.
The most important thing now is moving up the value chain and openly competing with EU/JPN/SK/US corporates. I'm just stating what I'm hearing talking to a few friends and family who work in the PRC in the scientific community.
Interesting with China hitting record trade surpluses this year I just wonder how they plan to increase household consumption if the wealth effect isn’t there (property is flat).
1/ pro cyclical spending of their surpluses which exports inflation to the West but would result in wage growth while it does run the risk of domestic inflation.
2/ Providing low and middle classes more access to financial assets / capital markets in Chinese equities via Hong Kong could be a substitute for a flat property market.
So instead of boats or flights to Macau, people can gamble/speculate on their own phones.
But isn’t the deflationary pressure could be dangerous as well ? Recently Hu Xijin just publicly says he has opened a stock account, is he hinting something... as I don’t feel like the stimulus is working well...
Not sure to understand: pro labour policies should contribute to higher inflation, so why then inflation in China is not rebounding ?
China has done a better job of reducing corporates ability to raise prices. So rising wages eats into profits and creates a weak stockmarket. Not true in US
The main issue at hand in the PRC is the struggle between local governments and the central government and the bad debts and how they're going to be restructured.
True - but that is also related to the idea of trying to ween the economy of being dependent on rising property prices
I'm in the camp of PRC property prices going up is over, people forgot about made in china 2025. The property market in my opinion is just a mess the central government is trying to clean up and just in damage control, you have to be delusional if you think the property market will keep going up like in the last 20 years. The main reason the politburo hasn't just let the whole RE industry go is because of employment and jobs.
The most important thing now is moving up the value chain and openly competing with EU/JPN/SK/US corporates. I'm just stating what I'm hearing talking to a few friends and family who work in the PRC in the scientific community.
Interesting with China hitting record trade surpluses this year I just wonder how they plan to increase household consumption if the wealth effect isn’t there (property is flat).
1/ pro cyclical spending of their surpluses which exports inflation to the West but would result in wage growth while it does run the risk of domestic inflation.
2/ Providing low and middle classes more access to financial assets / capital markets in Chinese equities via Hong Kong could be a substitute for a flat property market.
So instead of boats or flights to Macau, people can gamble/speculate on their own phones.
But isn’t the deflationary pressure could be dangerous as well ? Recently Hu Xijin just publicly says he has opened a stock account, is he hinting something... as I don’t feel like the stimulus is working well...
Maybe they feel the lessons has been learnt