Chinese Economics Thread

[Jura The idiot]

now I read
China's central bank unveils new targeted monetary tool
Xinhua| 2018-12-19 22:53:37

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China's central bank on Wednesday introduced a new kind of lending facility to encourage loans to small and private businesses.

The People's Bank of China (PBOC) is now open to applications from qualified banks for the use of a new tool called targeted medium-term lending facility (TMLF) to get stable long-term funds to support their businesses.

"[TMLF access of] financial institutions will depend on growth of their loans to small and micro businesses as well as private businesses," the PBOC said on its website.

Large commercial banks, joint-stock banks and major city commercial banks that lend heavily to the real economy and meet macro prudent requirements can apply for the TMLF, which has a maximum maturity of three years and an annual interest rate of 3.15 percent, 15 basis points lower than the existing medium-term lending facility (MLF).

The central bank uses monetary tools such as the MLF to manage short- and medium-term liquidity in the banking system of the world's second-largest economy.

The PBOC also announced Wednesday an increase of relending and rediscount quotas by another 100 billion yuan (around 14.5 billion U.S. dollars), citing effectiveness of previous expansions in improving financing to small and micro businesses as well as private businesses.

It has already boosted the quotas by a total of 300 billion yuan with two hikes in June and October this year.

China will continue to maintain a prudent and neutral monetary policy, enhance counter-cyclical adjustments, and ensure reasonable and sufficient liquidity in the banking system, the PBOC said.

 

[Anlsvrthng]

The FED and the PBoC doing the opposite.


As it looks like PBOC try to compensate the rate increase of FED.

Considering that the US has asymmetrically bigger credit market than China it is quite futile . Not like the PBOC have any other choice....

 

[Jura The idiot]

now I read
ofo founder admits bankruptcy fears as wheels threaten to come off
2018-12-20 15:11 GMT+8

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The founder of Chinese bike-sharing company ofo has conceded that the service is on the brink of bankruptcy after a year of “immense” cash flow problems, days after reports emerged that millions of people were waiting online for the return of their deposits.

In a message to ofo employees released Wednesday, founder and CEO Dai Wei conceded that on numerous occasions he had considered “dissolving the company and applying for bankruptcy.”

Referencing ofo's debts and efforts to repay deposits to millions of users, Dai said “to keep the company running we have to turn every one yuan into three.”

On Monday morning,

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of between 99 and 199 yuan ( between14 and 29 U.S. dollars).

Online, the “queue” of users awaiting the return of their deposits from the company has exceeded 10 million, with social media users posting screenshots showing the millions of users ahead of them in the refund process.

In October, ofo

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, with speculation that the company faced liabilities of about 6.5 billion yuan (932 million U.S. dollars), including 3.65 billion yuan of users' deposits and more than one billion in debt owed to suppliers.

One month later, users began reporting that the company was not returning deposits, and was instead

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. ofo again denied the reports, insisting its refund process was fully operational and that users could choose not to take part in the P2P scheme.

According to Dai's message, ofo had failed to “correctly assess the changing external environment from the end of last year.”

The company has received hundreds of millions of dollars in funding in recent years, with an 866 million-U.S. dollar funding round completed earlier this year.

However, a failed overseas expansion strategy that saw ofo enter markets in Europe and the U.S. was just one factor in the company burning through funds. According to the Financial Times, ofo was burning through an estimated 25 million U.S. dollars each month earlier this year.

Rival bike-sharing firm Mobike has also withdrawn from overseas markets, taken over by Meituan Dianping in April this year, in a deal that looks to have secured its finances, valuing the company at 3.7 billion U.S. dollars.

 

[Equation]

Consumer spending = income-saving+loans ______Agree?

Saving rate falling , consumer debt increasing YOY 4.somtehing% ._______Agree?
Inflation : 2.5% , GDP growth 6.5% __ __Agree?
Spending growth-loans growth+saving growth = income growth(decrease)____Agree?
9%-(debt growth 4.4%)+(saving growth negative saving growth -)= close to 0 income growth _____Agree? ->this is the critical part.

Have you ever had to solve process/machine/material/quality/business problems using statistical tools ever?

No, I don't agree at all. Haha You did all that to try to calculate a GIVEN? Your final conclusion is that income growth is 0%?

Here:

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And that's proof that you're wrong and your math is wrong. When at work, we use givens to calculate unknowns. If we presented work to the boss showing that we did incorrect math to make givens contradict each other, that's wasting time and that's how we become unemployed.

 

[Anlsvrthng]

No, I don't agree at all. Haha You did all that to try to calculate a GIVEN? Your final conclusion is that income growth is 0%?

Here:

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And that's proof that you're wrong and your math is wrong. When at work, we use givens to calculate unknowns. If we presented work to the boss showing that we did incorrect math to make givens contradict each other, that's wasting time and that's how we become unemployed.

If you don't agree with basic economic data ( like GDP) and basic accounting rules then the discussion is futile.

 

[Equation]

If you don't agree with basic economic data ( like GDP) and basic accounting rules then the discussion is futile.

No, I don't agree with accounting "rules" made by someone who doesn't even know the difference between debt and net worth; as a matter of fact, it looks like nobody agrees with you at all.

Of course I agree with economic data; I just posted some for you to see. Wanna see it again? Here:

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You obviously cannot use some official economic data to try to disprove other official economic data because:

1. your equations are incorrect. As a matter of fact, some of your lines don't even quality as mathematical equations! They're just numbers put next to each other, asking others if they agree. Next time you use an economic equation, cite where its from and how it's used. Don't post a Wikipedia page; quote the exact line and application. You don't have the economic knowledge needed to create them freehand.

2. if you're using data A, B, C, D together to disprove data E, then you're making the assumption that the probability that all of them are true is greater than the probability that E is true. According to your Occam's Razor, you're wrong. But I don't use Occam's razor; it is for simple people who cannot weigh evidence. I say that if you trust official published data, you trust all, or none. You cannot assume that whatever you want to hear is true and use it to disprove what you don't want to hear.

But honestly, #2 is giving you too much credit because these data don't contradict each other; they only do so with incorrect, made-up economic formulas.

 

[Jura The idiot]

here's the Financial Times story (dated just "yesterday")
Clock is ticking for Beijing to stimulate economy

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:

Credit squeeze lies at heart of what is ailing China’s domestic stock markets

This year has been both a momentous one and a time to forget for investors in China’s A-shares. It was momentous because shares listed in Shanghai and Shenzhen were included for the first time into an international benchmark index, effectively obliging some foreign investors to buy them. And it was a time to forget because the CSI 300 A-share index has fallen 23.9 per cent this year.

Thus, the obvious questions are: will the A-share pain recede and will the undertow of issues that have conspired to drag the market lower start to dissipate in 2019? The answer, according to a selection of analysts, is that if Beijing does not launch an economic stimulus package, things could get a whole lot worse.

Capturing the sense of gloom was a tweet this week from the usually upbeat Shaun Rein, Shanghai-based managing director of the China Market Research Group, a consultancy. “China’s economy is far worse than people realise,” he wrote. “Consumer confidence is plummeting. This is the first time I have become outright bearish on China’s economy.”

A similar readout came from Chen Long, the Beijing-based China economist at Gavekal Dragonomics. “Beijing’s easing policies have still not gotten traction,” he wrote. “There will certainly be more bad news on the economy through early 2019. In this kind of environment, equities will struggle and bond yields can fall further.”

Miranda Carr, China macro strategist at securities company Haitong, also had a sobering take. “Over the past year, China’s economy has looked like it is veering towards what we outlined as its ‘busted flush’ scenario,” she said. “There needs to be a fairly drastic action to steer growth back towards the longed-for ‘stability’.”

The “drastic action” that investors are pinning their hopes on is an effective stimulus by Beijing. Mr Chen, among several other analysts, says it is already clear that stimulus measures are planned but adds that crucial questions remain over the speed and scale of the steps that may be taken.

There is no consensus, however, on what stimulus tools Beijing may employ, partly because each option seems to pose risks of undesirable side effects. Some analysts say a cut in benchmark interest rates would stimulate corporate activity, but would also risk inflating already high property prices. Others say a big increase in bond issuance by local governments could help fund a surge in infrastructure investment but would risk worsening a debt trap that has ensnared many provinces and cities. A corporate tax cut could spur investment, but would deepen Beijing’s budget deficit.

There seems little doubt, though, that stimulus is required. November’s economic data showed a clearly easing trend. Industrial output rose only 5.4 per cent year on year, its slowest pace since 2008. Retail sales increased 8.1 per cent year on year, the slowest pace since 2003. But the most striking weakness was in the growth of total credit extended during the month, which Mr Chen estimated fell to 9.9 per cent, slipping below 10 per cent for the first time in the past 15 years.

This credit squeeze also lies at the heart of what is ailing China’s domestic stock markets. In the years of plentiful liquidity from 2014 to the start of 2017, a practice known as “equity pledged financing (EPF)” — under which key shareholders or managers of companies borrow using their shares as collateral — took off.

By the end of October this year, the contract value of pledged shares was Rmb6.3tn ($926bn) and as many as 3,540 listed companies had pledged shares under EPF, with 22.5 per cent of them having pledged more than 30 per cent of their shares, according to figures quoted in the Bank for International Settlement’s (BIS) latest quarterly review. As share prices declined this year, creditors have demanded the liquidation of shares to repay debts, driving stock prices further down.

The BIS analysis shows a sharp increase in the number of EPF loans facing liquidation pressure, a factor that appears likely to act as a drag on the market for several months to come, analysts said.

Such market dynamics form the backdrop to the inclusion of China’s A-shares into international investment indices. The big move that took place this year was the addition by MSCI, the index provider, of a first tranche of A-shares into the MSCI Emerging Markets index, the equity benchmark for emerging market investors around the world. MSCI is now proposing the addition of a bigger A-share tranche into the benchmark that would, if implemented, bring the total weighting of A-shares in the index to 3.4 per cent by the end of next year, up from the current 0.8 per cent. Because fund managers measure their performance against the benchmark, they are effectively obliged to buy the stocks that comprise the index.

For some, the dilemma may be knowing which A-shares to buy.

 

[Jura The idiot]

No, I don't agree with accounting "rules" made by someone who doesn't even know the difference between debt and net worth; as a matter of fact, it looks like nobody agrees with you at all.

...

OK I'll say it:

tidalwave
x
manqiangrexue

had been more entertaining, the manicure suggestion LOL! etc. etc., sometimes it's hard not read despite the stuff breaks the rules

 

[Jura The idiot]

now, giving the benefit of the doubt and reading

#9691 Anlsvrthng, Yesterday at 8:19 AM

Consumer spending = income-saving+loans ______Agree?

Saving rate falling , consumer debt increasing YOY 4.somtehing% ._______Agree?
Inflation : 2.5% , GDP growth 6.5% __ __Agree?
Spending growth-loans growth+saving growth = income growth(decrease)____Agree?
9%-(debt growth 4.4%)+(saving growth negative saving growth -)= close to 0 income growth _____Agree? ->this is the critical part.

Have you ever had to solve process/machine/material/quality/business problems using statistical tools ever?

huh,
Anlsvrthng

apparently you've added China's inflation to GDP to get "9%",
out of which you subtracted
an increase of China's households debt "(debt growth 4.4%)"
and then added "(saving growth negative saving growth -)"
to arrive at "close to 0 income growth";

I don't get what's "(saving growth negative saving growth -)"
so please elaborate, plus
Anlsvrthng
show units of all terms in your equation: you woudn't be mixing apples with oranges, would you?

 

[Jura The idiot]

now I read
China's first private rocket production base begins operation
Xinhua| 2018-12-21 16:42:53

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China's first private carrier rocket production base has started operation in Huzhou, east China's Zhejiang Province, according to the Beijing-based rocket maker LandSpace.

The company told Xinhua on Friday that their production base, with research and development (R&D) functions, opened last Wednesday.

The company's TQ-12 rocket engine and the ZQ 2 liquid-propellant carrier rocket will start production at the base in 2019. The ZQ 2, to be powered by the TQ-12, is scheduled to be launched in 2020.

It will be able to produce about 15 ZQ 2 rockets and 200 TQ-2 engines starting from 2022, according to the company.

"Having a manufacturing base is the first step for large-scale commercial production of carrier rockets and engines, and is expected to greatly accelerate the R&D and testing of our products," said Zhang Changwu, CEO of the company.

"Our goal is to produce liquid-propellant carrier rockets that feature innovative technologies, competitive prices and performance that can match global counterparts," Zhang said.

The Chinese government encourages the participation of private enterprises in the space industry. The country now has more than 60 private companies in the commercial space industry.