China’s stock markets have progressed, in the last three years, not necessarily to investor’s advantage. A look at the performance of broad indices over the period is self explanatory: Shanghai Stock Exchange Composite Index -25% Shenzhen Stock Exchange Composite Index -36% Hang Seng China Enterprises Index -7% Summary Conclusion Presently, nothing good can be said […]
Author: Nial Gooding
The paper highlighted today claims to be the first formal medical assessment of the ‘Bigu’ fasting regime. Bigu fasting (more here if you care Bigu Fasting) has been practiced in China in one form or another for over 2,000 years. Today it’s promoted as a Taoist ritual and is usually carried out at retreats under […]
First, a handy graphic from the note highlighted today. The Working Paper from the IMF raked over this morning sent me a long way down memory lane and, as this is my blog, you’ll have to allow the reminiscence. My first job was working as the assistant to the money manager of an insurance company […]
The IPO process in Hong Kong, as I’ll explain in this note, has been a serial value-destroyer in the last couple of years and part, but by no means all, of the problem lies within the industry that greases its wheels. It is investors though that must shoulder the final responsibility for a system that […]
The paper highlighted today is dense and the mechanics employed to get to the conclusions probably beyond the keenest (well, me anyway) of mortals. The summary though is intuitive and valuable. Videlicet? China’s multi-year and now multi-decade property boom has come with costs to other parts of the economy. Previous studies, for example, have highlighted […]
You’ll notice, when you look at a number of Chinese companies in depth, it seems they have a lot of academics on their boards; and they do. In fact, around 70% of all Chinese companies have at least one academic on the board (in the U.S. it’s around 40%). Jiaren Pang, Xinyi Zhang and Xi […]
Categories
China Investors: Hold-Fast!
In Brief The short-term macro outlook for Emerging Markets (EM), of which China is the largest, is poor; but stock prices have moved a long way to reflect this. This isn’t a compelling argument for fresh engagement. It is however a strong argument for investors already involved to Hold-Fast. Preamble The macroeconomic outlook for EMs […]
Does severe air pollution affect audit judgement? Spoiler alert, it does; but how? Using data from a sample period from 2003, when the first nationwide air quality data is available, to 2014 researchers Xingtai Baoding, Xiaofeng Peng and Jianguang Zeng from the Toronto, Toledo and Chongqing universities respectively show that where air quality was worse […]
The study highlighted this week, a 275-city analysis from 1999 to 2016, claims to be the most comprehensive analysis to date of China’s urban property market. Researchers Keyang Li, Yu Qin, and Jing Wu from the Tsinghua, Singapore and again Tsinghua universities respectively wanted to not only settle the much discussed affordability issue but also […]
The Obama administration worked with 11-nations in Asia over 8-years on the TPP that the Trump administration tore up shortly after the new President’s inauguration. The purpose of the TPP was to create an Asia trading club that included America but excluded China, a club in which America would dictate the rules. China in the […]
The Big Five banks in China (Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and Bank of Communications) control around 40% of system assets. So, if they’re not doing a good j0b it follows the system isn’t operating efficiently. Writing in a BOFIT (Bank of Finland Institute […]
China enters the WTO, U.S. manufacturing jobs begin a rapid decline; coincidence? It seems not. The paper this week, from John Seungmin Kuk, Deborah Siligsohn and Jiakun (Jack) Zhang of the universities of Washington, Villanova and California respectively, digs into the political response to what is now increasingly referred to in the U.S. as the […]
What a difference? On top is China’s R+D investment from 1996 to 2012. Over the period it rose from 0.6% of GDP to the now OECD near-norm of 2%. Below is India’s effort which has stagnated over the period at between 0.6%~0.8% (and the economy is much, much smaller). So China wins, right? Yes, relative […]
China is a tricky place in which to invest. China stocks are especially tricky and among the various classes (NASDAQ/NYSE listed, red-chips, p-chips, H-shares, A-shares) the onshore A-shares* are, in my opinion, the trickiest. [As part of my secret-sauce is knowing why this should be so no full argument here. A quiet word over coffee […]
Categories
The Sunday Paper – CAPE In China
I’m not a believer in the predictive ability of Cyclical Adjusted Price-to-Earnings or CAPE. I’m suspicious it’s just a highfalutin’ backward induction of the intuitive notion that cheap is good and dear is bad; but that’s just me. Suyang Xu of the University of Maryland has used it in the paper highlighted today to see […]
Once a year the IMF send a team to talk with policy makers in China to assess the economy, analyze the progress of reform, and offer suggestions that could help planners achieve objectives. They’re kind enough then to share findings with the rest of us. This year’s report was published last Thursday, July 26th and […]
Is there a difference in people from Northern China versus those from the South in terms of individualistic behavior? Are people from the north more assertive and people from the south more collaborative? Researchers Thomas Talhelm, Xuemin Zhang and Shigehiro Oishi from the University of Chicago Booth School of Business, Beijing Normal University and the […]
Within the five major financial asset classes in China i.e. stocks, real estate, bonds, commodity futures and foreign exchange which are the ‘dogs’ and which the ‘tails’, or, who wags whom? Researchers Kim Hang Low from the National University of Singapore and Xiaoxia Zhou of the Shanghai University of Finance and Economics looked at data […]
Americans smile more than Chinese. Fact, not just an anecdote. In the paper highlighted this week Thomas Talhelm, Shigehiro Oishi and Xuemin Zhang from the universities of Chicago, Virginia and Beijing Normal respectively studied not only photographs but set about observing students on campuses in Virginia and Beijing to record smiling. The difference between smiling […]
Dr. Marcia Don Harpaz, from The Hebrew University of Jerusalem Faculty of Law believes that China is heading in the direction of WTO leadership. Presently though it lacks, crucially, the ability to assume the role and the willingness of other nations to follow it. WTO leadership in the past has been characterized by two features: […]