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Sunday Papers

The Sunday Paper – A Short History of Technology Transfer and Capture: High Speed Rail in China

The first High Speed Rail (HSR) train ran in China in 2008 from Beijing to Tianjin on 113km of track. China’s HSR network today, at 18, 000km, is four times larger than Japan’s, 6x larger than France’s and 8x larger than Germany’s. It’s also, literally, infinitely larger than the U.S.’s which is, at present, non-existent. […]

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Thoughts

Nanning Fact Finder – Heady Momentum

We hear problems of overbuild and surplus capacity in China are pronounced in provincial conurbations. I had an opportunity to visit such a locale recently and what I found was a reality at odds with the stereotype and an economy surprising in terms of its dynamism. Nanning City    In theory Nanning (population 6.9m), being […]

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Sunday Papers

The Sunday Paper – A Real Estate Boom with Chinese Characteristics

Is there anything to add to volumes of work in recent years on China’s residential property market? To my surprise, reading the paper highlighted this week, I found there is. Researchers Edward Glaeser, Wei Huang, Yueran Ma, and Andrei Shleifer, writing in a National Bureau of Economic Research Working Paper, compare recent developments in China […]

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Sunday Papers

The Sunday Paper – Global Economic Governance in the Wake of Asian Infrastructure Investment Bank: Is China Remaking Bretton Woods?

First, it joins the WTO. Then, it begins internationalizing it’s currency. Now, it creates an alternative to the Asian Development Bank (ADB) with capital equal to two thirds of the ADB’s and half of that of the World Bank. Grassy-Knollists would see a pattern here. China is clearly engaged in a long-term bid to displace […]

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Thoughts

Yes, We Can Now Dare; To Be, Cautiously, Bullish About China

Preamble In April I posed the rhetorical question ‘Dare We Be Bullish About China?’ [Dare We Be Bullish]. Then, I concluded, the answer was no. That note was a follow on to another written in August 2014 when economic indicators were pointing to a rapid deceleration of economic activity and some sort of hard economic […]

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Sunday Papers

The Sunday Paper – Financial Misallocation, Pollution, and Sustainable Growth: Theory and Evidence from China

An obvious point often has to be made before it becomes, well, obvious. In the paper highlighted this week (math heavy and as if ejected from Google translate; but indulge) Wen Shuyang from the Southwestern University of Finance and Economics in Chengdu takes an alternative look at China’s pollution problem. He takes the novel, and […]

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Sunday Papers

The Sunday Paper – Stock Market Liberalization and Price Discovery: Evidence from the Shanghai-Hong Kong Stock Connect

The paper highlighted this week asks did price discovery in Shanghai improve after the Shanghai – Hong Kong stock connect introduction in November 2014? Songbin Sohn from Peking University and Na Jiang from Pennsylvania State University set about answering the question by analyzing stocks that trade in both markets, the so-called A-H shares. Because there […]

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Sunday Papers

The Sunday Paper – The Plight of Rural Migrant Workers in Urban China

For many years the free movement of people was seen as a net good (which it is). Locals in Texas would rather do nothing than pick melons and the ‘Polish plumber’ in the U.K. was for a long time a role model of migrant can-do spirit, contributing to the local economy and their own lot […]

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Sunday Papers

The Sunday Paper – Saving China’s Stock Market

A little over a year ago China’s domestic stock markets were in a death-spiral free-fall; and then the government set about restoring calm. Part of a package of measures was a stock purchase program using the agents of the China Securities Finance Corporation and Central Huijin. Not long after the intervention, because so much of […]

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Sunday Papers

The Sunday Paper – What Makes China Grow?

What’s especially interesting about the paper highlighted today is when it was written, back in December 2014. Then, Lawrence J. Lau of the Institute of Global Economics and Finance at The Chinese University of Hong Kong, noted overcapacity in the Chinese economy and a savings rate not conducive to encouraging household consumption. Of note, in […]

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Sunday Papers

The Sunday Paper – Does Infrastructure Investment Lead to Economic Growth or Economic Fragility? Evidence from China

The paper highlighted this week so neatly fed the tired trope that China’s infrastructure build has been mostly a bad idea it got widespread press coverage last month. Writing in The Oxford Review of Economic Policy Atif Ansar, Bent Flyvbjerg, Alexander Budzier and Daniel Lum, all from Oxford University concluded; ‘..unless China shifts to a […]

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Sunday Papers

The Sunday Paper – Judging a Book by Its Cover: Beauty Effects in the Promotion Tournament of Regional Leaders

It’s a harsh fact of life that good looking people, of both sexes, have better lives than moosey peers. They earn more money, have more partners and in many surveys have the cheek to record higher overall happiness scores. Beauty then is not in fact just skin deep, it ripples through a personality too. Why […]

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Thoughts

China; Finer?

Preamble My investment thesis for China hasn’t changed much in recent years; for new readers it goes like this: China, fundamentally, is fine. Its financial institutions are, fundamentally, fine. Its political system is, fundamentally, fine. Its citizenry is, for the most part, happy with its lot and businessmen of all hues are presented with many […]

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Sunday Papers

The Sunday Paper – A Rebalancing Chinese Economy: Challenges and International Implications

An article appeared in the September 3rd edition of the Economist Magazine [Australia’s Economy – Good on you] from which one line jumped out at me. ‘As China rebalanced and commodity prices tumbled,..’ it began. This was the first time I’d seen in print an acknowledgment that China’s economy is fully in rebalance mode. The […]

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Sunday Papers

The Sunday Paper – The Effect of Pollution on Worker Productivity: Evidence from Call-Center Workers in China

Another first from the German based Institute for the Study of Labor (IZA). Last week’s paper showed a conclusive link between mental health in the elderly and wealth, the first study of its kind to prove a clear association. This week’s paper, again from researchers working for an IZA report, show a link between white-collar […]

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Sunday Papers

The Sunday Paper – Does Money Relieve Depression? Evidence from Social Pension Eligibility

That there’s a relationship between health, happiness and relative wealth has been understood for a long time; but studies have struggled to isolate the dependent variable. Are healthy people capable of earning more money and therefore better off or are people who are better off less stressed and therefore less prone to illness? In the […]

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Sunday Papers

The Sunday Paper – Understanding Recent Trends in Income Inequality in the People’s Republic of China

Has income inequality increased or decreased in China in recent years? The chart provides the clear answer. It’s decreased. This is consistent with an intuitive theory [Kuznet’s Curve] that posits developing economies will experience increasing income inequality in the early stages of their development; but this will reverse in the later stages. So we’re all […]

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Sunday Papers

The Sunday Paper – Does Female Labor Scarcity Encourage Innovation? Evidence From China’s Gender Imbalance

In theory, firms facing a shortage of something are more likely to progress innovation than firms who are faced with an abundance of factors necessary for production. In practice this is hard to prove. Zhibo Tan, assistant Professor at the School of Economics at Fudan University and Xiabo Zhang, Professor of Economics at Peking University […]

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Sunday Papers

The Sunday Paper – International Trade And Job Polarization: Evidence At The Worker-Level

The paper highlighted this week looks at an issue shaping political debate across the developed world. What effect has China (and by implication other developing nations) had on employment patterns in the West? Wolfgang Keller and Hâle Utar of the universities of Colorado and Bielefeld respectively studied employment patterns in the textiles and clothing industries […]

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Thoughts

Could China Stocks ‘Do A (1980’s) Japan’?

A copycat economy built on credit overly reliant on exports. Appalling corporate governance, unhelpful IR teams and hardly cheap stocks. Sound familiar? I’m not referring to China stocks today though. This was the received wisdom about Japanese stocks when I began my career in Asia in Japan in 1984; and we all know what happened […]