Chinese Economics Thread

[Gatekeeper]

China Stocks in U.S. Suffer Biggest Two-Day Wipeout Since 2008​

Beijing’s sweeping crackdowns of its technology and education sectors has unleashed shockwaves across global markets, erasing $769 billion in value from U.S.-listed Chinese stocks over the course of just five months.

The Nasdaq Golden Dragon China Index -- which tracks 98 of China’s biggest firms listed in the U.S. -- plunged 7% Monday after regulators in China unveiled an

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of its education sector which bans firms that teach school subjects from making profits, raising capital or going public. That adds to Friday’s 8.5% drop, bringing the gauge’s two-day decline to 15%, its biggest since 2008.

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That's it. I've had enough. Come on Sherlock. Tell us why high stock price is so important to a company?

 

[Team Blue]

Stock go up and down all the time nothing surprising. Stock market is not the same as main stream economy so live with it!. The underlying Chinese economy is healthy factory output is rising, export rising, consumer consumption growing, Debt is on way down, infrastructure investment on track. I would say Chinese economy now is entering goldilocks period

Stock market going up and down has yet to provide any change in my income. Nobody living paycheck to paycheck gives a damn what the NASDAQ is.

 

[Hendrik_2000]

Stock market going up and down has yet to provide any change in my income. Nobody living paycheck to paycheck gives a damn what the NASDAQ is.

Well I wouldn't dismiss stock market. But it is a long term investment. If you choose your stock wisely, have a steel nerve, ride out up and down, then over the time you do make money
Stock is a share ownership in company. Over the year if the company make money you too will make the money. but you cannot make money overnight or in one or two years. Need patience, forbearance and steel nerve.

 

[Franklin]

China moves to protect food delivery drivers from digital exploitation, knocking stocks such as services giant Meituan​

• The policy guidelines come as China ramps up a campaign to rein in Big Tech, forcing the sector to put greater emphasis on consumer and worker rights
• The guidelines are designed to protect basic labour rights for riders, including a base income, work safety, food safety, a decent working environment

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This is pure populist BS. If you do these things than food delivery is going to become more expensive. And fewer people would use it or they have to reduce consumption elsewhere. The road to hell is always paved with good intentions. Just look at California. Xi is moving China into the wrong direction and maybe this is the beginning of the end for the "Chinese economic miracle".

 

[manqiangrexue]

This is pure populist BS. If you do these things than food delivery is going to become more expensive. And fewer people would use it or they have to reduce consumption elsewhere. The road to hell is always paved with good intentions. Just look at California. Xi is moving China into the wrong direction and maybe this is the beginning of the end for the "Chinese economic miracle".

Well, there needs to be a balance between making things afordable so that the economy booms and protecting the most vulnerable class of unskilled workers. China is for benefiting all of its citizens regardless of class but we currently have a class of workers whom are called the Ant ethnic minority, of course with the ethnic minority part being a joke. These refer to the workers who work 100 hours a week performing menial labors that make big cities run but are paid so little, they live 6 people to a room in run-down basements with no heat or AC. They live like ants. Even though China's poverty allevation is the most successful in the world, critics can still reasonably argue that these people are still in poverty. Paving a better way of life for them is critical to reducing Chinese social inequality in China's rise to a modern ecnomy. Because of their track record, I trust Xi and his cadre have done many studies and are moving very carefully to achieve the right balance so that China's economic boom is reasonably sustained while also combatting this type of de facto poverty right in its metroplises.

 

[Franklin]

Well, there needs to be a balance between making things afordable so that the economy booms and protecting the most vulnerable class of unskilled workers. China is for benefiting all of its citizens regardless of class but we currently have a class of workers whom are called the Ant ethnic minority, of course with the ethnic minority part being a joke. These refer to the workers who work 100 hours a week performing menial labors that make big cities run but are paid so little, they live 6 people to a room in run-down basements with no heat or AC. They live like ants. Even though China's poverty allevation is the most successful in the world, critics can still reasonably argue that these people are still in poverty. Paving a better way of life for them is critical to reducing Chinese social inequality in China's rise to a modern ecnomy. Because of their track record, I trust Xi and his cadre have done many studies and are moving very carefully to achieve the right balance so that China's economic boom is reasonably sustained while also combatting this type of de facto poverty right in its metroplises.

And soon a lot of these people who work these menial jobs will have no job at all either because the customers are no longer there or they will be replaced by robots.

 

[MrCrazyBoyRavi]

That's it. I've had enough. Come on Sherlock. Tell us why high stock price is so important to a company?

Ofcourse its important. They can do stock offering at higher price to raise good capital for expansion, research or other expenses. Tesla do it regularly to maintain balance sheet, pay salary, make new factories or expand abroad. I don't know about companies but CEO's or founder of the company also take loans by putting their stock as collateral. Hence drastic reduction in stock price can trigger margin call and force the person/company to sell their stock, business.

 

[W20]

"This is pure populist"

Well

this is the Difference between Chinese philosophy-religiosity based on Confucius and NorthAmerican philosophy based on the fusion of Roman imperial Ideology and Old Tentament

Confucius: the heavens say: our plebs are our people, the junior has to respect the senior and the senior has to take care of the junior

Bible, Old Testament: "God our Lord" say: "a people (of Lords)" (a "HerrenVolk") must subdue "the people of the land". An idea that fit perfectly with Roman imperialism and Roman capitalism

Confucius would have understood Tiberius Gracus very well

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[manqiangrexue]

And soon lot of these people who work these menial jobs will have no job at all either because the customers are no longer there

Like I said, that's why there needs to be a balance struck. Many economies in the world show that it's not impossible to grow while implementing minimum wages to protect your unskilled laborers, thus expanding your middle class. They don't have to be thrown under the bus for everyone else. You wouldn't feel this way if you were born to a poor village and went to Beijing to work as a delivery guy to start a life there.

or they will be replaced by robots.

That is modernization. They will need to be put to other tasks and hopefully trained. Keeping your society primitive and mechanization to a minimum is never the way forward.

 

[Franklin]

Like I said, that's why there needs to be a balance struck. Many economies in the world show that it's not impossible to grow while implementing minimum wages to protect your unskilled laborers, thus expanding your middle class. They don't have to be thrown under the bus for everyone else. You wouldn't feel this way if you were born to a poor village and went to Beijing to work as a delivery guy to start a life there.

That is modernization. They will need to be put to other tasks and hopefully trained. Keeping your society primitive and mechanization to a minimum is never the way forward.

By introducing all these new regulations to protect the low skilled workers you are making it more difficult for low skilled workers to find jobs. Which may create the very unrest in society you want to prevent. Its a paradox!