One of the sillier stories in recent weeks has been about the debt of the China Railway Corporation (CRC) being twice as large as Greece’s. The observation being irrelevant of course without some discussion of what’s on the other side of the balance sheet. In Greece’s case not a lot; we are and should be […]
Author: Nial Gooding
Professor Gary King at Harvard, together with Assistant Professor’s Jennifer Pan from Stanford and Margaret E. Roberts from the University of California have done several remarkable things in the paper highlighted today. Not only have they produced the first in depth study of how the Chinese authorities attempt to manipulate views on social media they’ve […]
That tastes formed while young are sticky is not a new observation. I’ve lived away from the U.K. for over 30-years and you’ll still find Marmite somewhere in my kitchen. What this paper, by K. Sudhir and Ishani Tewari of the Yale School of Management produced in March this year, however adds to the understanding […]
The authors of this note, Hanming Fang, Quanlin Gu, Wei Xiong and Li‐An Zhou from the universities of Pennsylvania, Peking and Princeton, serve up some real zingers for the uninformed about why China’s residential property market is not pre-bust Japan or the gaussian copula worshiping U.S. of the early naughties. Their observations are all the […]
The message in this paper, written only last month, is clear. The present system of local government finance is unsustainable. Fan Ziying and Wang Guanghua from the Shanghai University of Finance and Economics and the Director of Research of the Asian Development Bank Institute respectively trace the problem back to a major overhaul of the […]
China has a distinguished history, in statistical terms, of keeping tabs on its citizenry. Recently, increasingly sophisticated surveys are making number crunching easier for outsiders and the paper highlighted today is based on one such survey. The China Household Finance Survey covers 25 provinces, 65 cities, 80 counties, and 320 communities, including 8,438 households and […]
Whose opinion should we give more weight to? The Armchair General calling tactical moves from behind the lines or subaltern’s in the field engaged in the day to day struggle? It’s a moot point. From time to time views from both are likely to be useful. What’s probably not a good idea is to rely […]
I’ve said many times ‘China isn’t near half-way done’; but the paper I’m highlighting this week, from Justin Yifu Lin and Fan Zhang, both professors at Peking University, suggests I’m wrong. China may not even be near one-third done. They take a simple metric, China’s per capita GDP as a percentage of the same number […]
Categories
Dare We Be Bullish About China?
In September 2014 I wrote about China heading toward a hard-landing Hard-Landing; and that sort of happened. I wrote again, in September 2015, about how we seemed to be then navigating a bumpy-bottom Bumpy-Bottom. I’m wondering now, is it time to start being more constructive? Summary Conclusion To be clear, when I talk about China […]
The issue of higher education in China is one I have no push-back on to the view that it’s poor, globally not competitive and showing little signs of improvement. I’ll argue happily about the soundness of the financial system, the track record of the Chinese Communist Party or the long term value of infrastructure spending; […]
The authors of this paper are at pains to point out that nobody, themselves included, can give a categorical answer to the headline question. However Jingyi Jang and Kei-Mu Yi, in this recent paper from the Federal Reserve Bank of Minneapolis, have a stab based in part on the Japanese and Korean experience. Bears will […]
In financial markets a not understood pattern of behavior is often dismissed as a product of other operators’ foolishness. Why do people like penny stocks? They’re naive. Why do people think stock splits increase the value of a company? They can’t do basic math. Why do people buy gold? They don’t understand asset valuation; and […]
A number of people have approached China’s GDP figures via the backdoor of coincident indicators, most notably Premier Li Keqiang. Partisan work has been done concluding official GDP numbers must be a multiple of reality but in the very brief (a merciful 3-pages) paper highlighted this week from Jun Nie of the Federal Reserve Bank […]
It’s been widely reported that large numbers of ‘evangelical’ Christians in the U.S. are supporters of a racist, misogynistic, self aggrandizing, bully running for the Republican Party’s nomination as their Presidential candidate. How do we explain this apparent conundrum? I wondered, as I’m sure many do, so started some digging… Studies going back as far […]
Notwithstanding the fact that some of the biggest corporate frauds in history have been perpetrated in the U.S., and that accounting irregularities come up with a proven frequency more in U.S. companies than elsewhere, the US Securities and Exchange Commission, on June 9th 2011, issued a warning to investors about (effectively) Chinese ‘reverse-merger’ companies (we […]
I had the privilege of meeting Lawrence ‘Larry’ Summers a little while ago (OK, me and a roomful of other investors). I was rocked; sometimes you just know you’re in the presence of genius. Ever since I’ve thought he’s worth paying attention to. Since the GFC he’s been on a crusade to try and get […]
Would you give money to a manager who said their strategy was to buy dull stocks? You probably should; but the conundrum here is that no manager will advertise such a strategy as they’ll raise little money if they do. There is now however clear and growing proof that it’s a very sound course of […]
Monetary policy is based (in part) on the theory that interest rates affect the level of savings and investment and produces a so-called ‘IS Curve’ (IS for Investment Savings). In theory this line should slope down from left to right on a chart where interest rates are the left hand side and GDP is along […]
Categories
Hong Kong – A Golden Era Ends
This is a longer note than I usually write but as I expect it’ll be the last piece I write on Hong Kong for some time I wanted to be thorough. Events in the last couple of years have convinced me the views expressed here will not need much revision. A self-destructive die has been […]
A study published in 2014 reached the comforting conclusion, for QFII operators, that foreigners bested local managers when returns in the domestic A-share market were compared. The study though wasn’t especially rigorous relying on annual observations which, since we’ve only had QFII since 2003, was a very small data set. In the paper I’m highlighting […]