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Thoughts

The China Dream Absolute Return Fund – Closing Letter – November 2024

This letter has been sent to Fund Investors and others likely to have an interest. If you’d like a PDF it’s here. Otherwise a copy is pasted below.

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Sunday Papers

The Sunday Paper – China’s Path to Sustainable and Balanced Growth

That China listens to the IMF is a reassuring and observable fact. So, when the IMF produces a targeted analysis on China’s currently single most serious problem, growth or lack thereof, it’s worth a closer squint. In the IMF Working Paper at this link China’s Path to Sustainable and Balanced Growth staffers Dirk Muir, Natalija […]

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Sunday Papers

The Sunday Paper – Beyond the Fundamentals: How Media-Driven Narratives Influence Cross-Border Capital Flows

In light of recent political developments in the United States do we think China-bashing by Western governments and Western media will: A. Continue as before? B. Decrease in intensity? C. Increase in intensity? If, like me, you believe C is the most likely outcome the paper highlighted today from Isha Agarawal of the University of […]

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Sunday Papers

The Sunday Paper – How ESG Rating Divergence Affect[s] Corporate Audit Fees

Researchers Hongtao Chen, Yunlang Wu and Jun Huang, all from the Shanghai University of Finance and Economics found an interesting link between ESG ratings and audit fees. Along the way they note nearly 600 agencies are now providing ESG rating services globally with roughly 20 [Surely more? Ed.] of those in China. The problem with […]

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Sunday Papers

The Sunday Paper – How Domestic Institutions Shape the Global Tech War

[If the future of the ‘tech-war(s)’ is of more than passing interest I recommend you commit the 30-minutes or so a reading of the full text requires. The link is at the end.] Anu Bradford, Matthew C. Waxman and Eileen Li, all at the Law School of the Columbia University, in a pre-print for the […]

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Sunday Papers

The Sunday Paper – The Impact of the Chinese Exclusion Act on the Economic Development of the Western U.S

Joe Long from the Northwestern University (et al.) acknowledges one of the problems with this analysis is it covers a period when the region being studied, the western states of the United States, did pretty well. The conclusion of the work though is although white miners in the west were beneficiaries of the Chinese Exclusion […]

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Sunday Papers

The Sunday Paper – Managing the Decline of Coal in a Decarbonizing China

Michael R. Davidson at the School of Global Policy and StrategyMechanical and Aerospace Engineering Department of the University of California, San Diego takes the long look at China’s coal ‘problem’. That coal in China is a problem, and one getting worse, is in no doubt. China consumes half of the world’s coal used, five times […]

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Sunday Papers

The Sunday Paper – Understanding Corporate Governance in China

Fuxiu Jiang from the Renmin University and Kenneth Kim from the Tongji University have prepared a paper that drills down into the mechanisms that make corporate governance (CG) different in China. They believe the arc of China’s CG progress will bend neither towards the Anglo-U.S. model nor to Japan-German practices. As the ‘China-Model’ is still […]

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Sunday Papers

The Sunday Paper – The Renminbi’s Global Role as an Anchor Currency: No Evidence

Kari Heimonen and Risto Rönkkö from the University of Jyväskylä and the Bank of Finland have taken a fresh look at the ever-topical notion that the Rmb is increasingly being woven more into the global currency system Since China got off its narrow U.S. dollar peg in 2005 there’s been a strong case to be […]

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Sunday Papers

The Sunday Paper – Understanding E-Cny Adoption Intention Among Individual Users: A Mixed-Methods Approach

The young men (and they’re all young men BTW) in t-shirts with tats who promote cryptocurrency at the University of YouTube regularly cite the coming of Central Bank Digital Currencies (CBDCs) as a key reason to love the crypto; but so far and to date, CBDCs have failed to arrive. Nobody has made more of […]

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Sunday Papers

The Sunday Paper(s) – Productivity – And How to Revive It [The September ‘Finance and Development’ Magazine from the IMF]

The IMF’s regular publication ‘Finance and Development’ is free and an always good read. The September edition though is especially interesting so I’ve decided to highlight the best articles from it today. You can get a copy via the following link Finance and Development – September 2024. The magazine focuses on a key issue for […]

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Sunday Papers

The Sunday Paper – How Does Management Guidance Affect Investors’ Responses to Earnings Announcements?

Henry L. Friedman of the University of California’s Anderson School of Management (et al.) found a unique opportunity to test whether or not management guidance helped investors to more orderly or ‘better’ markets. In June 2020 China’s regulators dropped the requirement for companies on their GEM board to provide mandatory earnings guidance. Following the rule […]

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Sunday Papers

The Sunday Paper – As the U.S. Is Derisking from China, Other Foreign U.S. Suppliers are Relying More on Chinese Imports

The U.S. decided in 2017 to clip China’s wings as an export manufacturing powerhouse. Since then China’s trade balance has gotten a lot bigger. In June it reached a new record. So what’s going on? Trang Hoang and Gordon Lewis, researchers at the FED, have twigged part of the answer which they discuss in a […]

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Sunday Papers

The Sunday Paper – China’s Long-Term Growth Potential: Can Productivity Convergence Be Sustained?

Koichi Yoshino from the Tezukayama University (Nara) together with others from the Bank of Japan address the China-growth question in the context of the Asian Fantastic-4 (F4, Japan, Korea, Taiwan and Singapore) who’ve already blazed the trail. They conclude, if China can follow the same path the results should be equally impressive. However.. China differs […]

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Sunday Papers

The Sunday Paper – Only through Market-Oriented Reforms can China’s Future Economic Growth Rate Increase by 5.5%

The paper highlighted this week starts with an important point. If China doesn’t continue to grow at a high rate that’ll suck for China AND the rest of the world. We’re not that far away, so most will remember, from the period after the Global Financial Crisis when China’s bold stimulus produced the largest component […]

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Sunday Papers

The Sunday Paper – The IMF’s Annual Survey of China and Its Prospects

Formally known as the ‘2024 Article IV Consultation’ this annual exercise often reveals more about what’s on China’s planners minds than what the IMF ‘outsiders’ wish for them. The work was completed in July but the full report was only released on August 2nd and you’ll find it (137-pages) in full here. Below I’ve extracted […]

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Sunday Papers

The Sunday Paper – Partial Nationalization and Firm Innovation—Empirical Evidence from China’s Mixed-ownership Reform

There’s an important caveat that qualifies the work highlighted today from Yufei Zhang at the Graduate School of Economics at the University of Kyoto in Japan. Viz.: “..our results can only be understood under the Chinese special institutional background, where the most important economic resources are controlled by public sectors (including governments, SOEs and state-owned […]

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Sunday Papers

The Sunday Paper – Where Ideas Come From: “The Spirit of Capitalism” in Medieval China

[Another contribution to the ‘why China never made it to an industrial revolution whilst the West did’ discussion.] Ruanzhuo Zhai from the Renmin University and Xiaoyang Luan from the HKU Business School have identified a period in China’s comparatively recent history, from the 10th to the 14th century, when a mercantilistic school of Confucianism flourished. […]

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Thoughts

If China Stocks Are In A Bear Market, That’d Be Good News

If, and it is an ‘if’, China stocks aren’t perched on a ledge before another big tumble then they’re consolidating in a bear market. If that’s the case, this would be good news. To be clear, a bear market is different from one that’s just gone down. A true bear market is when all hope […]

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Sunday Papers

The Sunday Paper – [The] U.S.’s Tech War Against China: The Only Option

I’m flagging the ‘paper’ this week despite it being poorly written, un-reviewed, lacking rigor and by somebody who’s claimed affiliation (London School of Economics) I have a question mark over. Having said all that, Neha Baid in the monograph linked to below, makes such a startling, counterintuitive point about the state of relations between the […]