An interesting analysis from Andy Xie today, focusing on one of the ways China can begin to re-establish new sources of economic growth. In this case, solar power. I don't know if Andy's positivity on solar power is supported by current technology, but given the long-term
Deflation is such a negative word that journalists don’t think more deeply about the market forces at play. Here, CNBC warns that falling consumer prices are “not helping”: Plunging pork prices in China are pushing the world’s second largest economy closer to deflation, in what could be another
As we move into 2024, a lot of critical decisions will be made. Resources are limited, and funds pushed in one direction means less funding for other things. The Chinese government really seems to be trying to have it both ways. A strong statement about Taiwan, claiming that 'reunification&
China has made incredible economic gains over the past two decades, modernizing much of its economy. However some portion of those gains only exist on paper. In a variety of ways, China has created artificial growth, an economic bubble or even multiple bubbles, which must eventually be recognized and resolved.
The sentiment of Xi Jin Ping that 'Houses are for living, not for speculation' is a positive sign. What would the market look like if speculation could be curbed, and housing could be affordable? How we got here The housing market in China is in serious distress, and
It is truly stunning to consider the corporate destruction of the past several years in China. Huge public entities in education like New Oriental and TAL Education have been kneecapped, with their business model simply put off limits. An entire industry, after-school tutoring, decimated by executive fiat. A message that
This piece is a reaction to Bob Davis' excellent article in Foreign Policy, laying out an optimistic view of China's current crisis, while grounding the discussion firmly in the facts on the ground. It is certainly important to explore both sides in a debate, as long as
This article in the New York Times is quite interesting for what it says and does not say. The piece includes a lot of very interesting and useful facts, but fails to some extent to ask bigger questions. The biggest problem is that the government’s plan, as explained in
Andy Xie is always a pleasure to watch. On Bloomberg last week Andy strongly indicated that China was or would be in recession. He was remarkably upbeat, which implies that he expects the government to recognize the necessity of a recession and manage the economy down to a safer base.
China’s economy is in a very precarious position now. The proximate cause of this economic weakness is the unraveling of the housing market, with several large developers now bankrupt, and many smaller developers in dire straits. Deflation looms; it is likely inevitable. With the end of the debilitating Covid-Zero
Another shadow bank falls, and with it thousands of unhappy clients. The pressure builds; when this class of people gets large enough there will be serious problems. It is notable that China’s domestic media is covering this story, and South China Morning Press made a video about some of
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