What makes the International Finance Discussion Paper highlighted today from the Board of Governors of the Federal Reserve System so useful is not just its scholarly conclusions, but also its commonsense observation that in reality their work may provide only conservative estimates of the magnitude of a global shock resulting from a China hard landing. […]
What’s wrong with the following statement? The Chinese save too much; and this leads to a large current account surplus that’s destabilizing for both them and the world. It may have been correct ten or even five years ago; but IT’S NOT NOW. Let’s first have a look at that over-saving notion. The chart here […]
Why have Chinese State Owned Enterprises (SOEs) stayed so big and, in many cases, gotten bigger in recent years? Work from Jim Huangnan Shen from the University of London, School of Oriental and African Studies (et. al.) clarifies some notions that were, until this work, mostly anecdotal. From around 1998 the Chinese government initiated a […]
Human beings have inherited ticks from their ancestors that were handy when roaming the plains of the Serengeti but are now dangerous if not commonsensically moderated. Two notable examples are dietary preference and risk taking. Our ancestors gained a reproductive advantage from gorging when they could, especially if what was on offer was either sweet […]
You’re a government that wants to encourage output (and what government doesn’t?). There are two way you can do this; stimulate investment or innovation. In 2004 China decided it wanted to encourage the latter and chose six metal-bashing industries in the notoriously metal-bashing-centric provinces of Heilongjiang, Jilin and Liaoning as experiments for a pilot reform […]
A short paper from Ruwei Zhao at the School of Business at the Jiangnan University in Wuxi has a very clear message that requires no real elaboration. So here it is: There is a clear correlation between an uptick of interest in TMC a year ahead of a stock price collapse; but there is no […]
You’ve heard by now there’s a United Nations report that documents upwards of 1m Uighurs held in captivity in ‘concentration camps’ in Xinjiang? There is, in fact, no such report. There’s no smoke without fire though and the story is rooted in an event that took place on August 10th last year. China is a […]
Hongchang Li, appropriately from the Beijing Jiaotong (交通, traffic) University (et. al.), wanted the answer to a simple question; is money spent in China on transportation infrastructure money well spent? For the purposes of the research ‘well spent’ was defined as investment that led to a rise in local GDP i.e. what ‘bang’ is being […]
Writing in the Journal of Foreign Affairs Weijian Shan, Chairman and CEO of HK based PE firm PAG and author of the recent book ‘Out of the Gobi: My Story of China and America’ concludes America will be the loser from the trade war if it’s protracted. The main point he makes is the trade […]
Nobody really knows why China’s domestic A-shares trade at a premium, and have now for a very long time, to exactly the same shares listed in Hong Kong in H-share form. [A coffee, at your expense of course, and you can have my not very informed two-pennyworth at your leisure] Taking the approach, (sort of) […]
In the smallest of nutshells, here’s the picture (below) that sums up the 258-page report released by the ADB Wednesday last week, an update to work published earlier in the year. The elephant in the room is of course the trade dispute between America and China. Trade between the two countries is now conspicuously affected […]
Here’s the main problem with 5G (the chart below). The people who (currently, but that could change) are being asked to build the network may baulk at a potential repeat of what happened the last time they spent billions building the present network architecture. The paper highlighted today covers a lot of ground in a […]
China has been suspected [Because it’s true? Ed.] of fudging GDP data and called out, even by senior Chinese politicians, for doing so. However, a discrepancy between local and centrally tabulated GDP isn’t a problem unique to China. In America, according to the paper highlighted this week, local GDP calculations sum to around 1% higher […]
Should an Emerging Market economy (like China) allow it’s capital account to be liberalized? You’d think the answer would be obvious. However, like many other financial theory glib conclusions real-world experience suggests the answer is, in fact, complicated. Researchers are always looking for before-and-after situations to test theories and one was provided in China that […]
America’s “..capacity to uphold a favorable balance of power [In the Indo-Pacific] is increasingly uncertain.” could be the one-line summary of a new report published August 19th by the United States Studies Centre at the University of Sydney. It’s a long piece and alarmist in places; but the central argument i.e. that America’s military capability […]
The IMF (who work closely with the planners and whose opinion is therefore especially of note) produce an annual report on China’s economic progress and the latest edition came out August 9th. There’s a six chart summary and that’s linked to at the bottom of this note. The link will also lead to the 51-page […]
If VC or PE is your thing the work this week from Zhaojun Huang and Xuan Tian from Tsinghua University may be of interest. The real juice is the series of charts from around P.30 of the 58-pager and here’s just one that sums up the market neatly. Before you get to those charts though […]
[The paper highlighted this week is perhaps the least intelligible work I’ve reviewed, at least as far as the general reader is concerned. I won’t therefore express a view on the methodology and have to assume the conclusions are, at least in a general sense, valid.] In the paper highlighted this week Mario Arturo Ruiz […]
The U.S.-China Trade War is providing a laboratory for social scientists, economists and statisticians generating volumes of data that’ll be studied for decades (centuries?) to come. The paper highlighted today is just one of what will be thousands of works to come and because of its proximity to events is incomplete and flawed. However, it’s […]
[First; a ranty preamble. Well, it is my blog after all. Confucian, Confucianistic and Confuscianist are terms gaining greater currency in discussions about how things work in this part of the world. These terms are all euphemisms for the same thing i.e. ‘Chinese’ or ‘China-infuenced’. I object to this new usage as it’s at best […]