CHINA SHOCK: Desperate attempt in 2016 by margins, subprime, and printing more money than after 2008 were successful in soft landing so far in 2017. $645 billion subprime and printing more money than after 2008. China/companies LIES about 7% GDP when export are down 25% import dropping 14%, construction equipment down 50%, 12% drop in train cargo, stock drop etc. Shanghai Index is ponzi pyramid bubble with fundamental value below 1500. Only reason IMF considering Yuan garbage in basket is to prevent total collapse and chaos. China have us$28 trillion debt. us$5 trillion toxic bank debt. Some workers are unpaid for many month. 20% counterfeit. 300,000 military layoff. 2015 us$1 trillion capital exit. China begin to praise Japan in media about $30 billion aid and technology transfer and modernization.
China is probably using THAAD as an excuse to exclude S korea.
China LIES about 7% GDP when export are down 8% and import are down 19%. Fundamentally value of Shanghai Index is below 1500 since stock should be around 10 PE plus growth minus risks but it went SPETACULARLY up from 2000 which is a speculative ponzi pyramid bubble. China lies, companies lies, plus corruption so risk makes it way less valuable than G7 stocks. There’s capital flight and naked official families moved to west. Ponzi unwinding plus economy don’t look good so going down below 2000 slowly is GOOD thing since closer to reality. Dead cat bounce is a process in things like stock market where steep drop stops and go up temporary a little only to drop sharply again like ball going down steps. China should start buying it AND share the ownership with POOR 1.3 billion that was left behind.
Perhaps China INTENTIONALLY trapped semi-rich top 20% of population with stock crash. This hurts corrupt rich, aggressive speculator/gambler type, and chinese cannot afford to go to Japan and realize how great Japan is. Plus tell people evils of capitalism and I told you so factor. Or steal from international investor that were forced 50% partnership and make bad loss and abandon equipment and share.
IMF requested china to not to manipulate yuan. SO, china REDUCED manipulation and let yuan move. IMF realizing much weaker yuan was NOT desirable so IMF stated yuan was fairly valued(lied lol). I think FAIR VALUE for yuan is 20-60% BELOW now since chinese real estates are still around G7 level.
China’s economy is slowing down. Surprise surprise. Investors are basically discounting government reported growth rates by at least 100 basis points, which puts China’s GDP growth this year at around 6%. As it slows further next year, countries that rely on China for exports will feel a margin squeeze across some key industries. Whether its BHP Billiton in Australia, or Hon Hai Precision Industries in Taiwan, a Chinese slowdown is something these 10 countries will have to face sooner rather than later. It’s likely to impact corporate credit. And it might even impact government accounts as less demand for exports to China means countries will have to make up for it with other countries. It’s unclear who will be able to pick up the slack.
Exports to China are at risk in the event of a rapid slowdown, while a high level of imports from China exposes a country to disinflationary pressures. Here are the top 10 countries exporting to China and the year-to-date performance of their corresponding exchange traded funds
10. Indonesia (IDX -21.7%)
China accounts for roughly 10% of Indonesia’s exports, equivalent to 2% of its GDP.
9. Thailand (THD -16.21%)
China accounts for 12% of Thailand’s exports and 7% of its GDP.
8. Malaysia (EWM -20.4%)
Getting up there. China is 12% of Malaysia exports and 10% of its GDP.
7. Brazil (EWZ -33.6%)
China is basically 18% of Brazil’s exports and is its single biggest foreign market for Made in Brazil. But as far as GDP, China accounts for just 2% of that.
6. Peru (EPU -31.4%)
China is 19% of Peruvian exports and roughly 4% of its GDP.
5. Japan (EWJ +11.83%)
China is also 19% of Japan’s exports and 3% of its GDP.
4. Chile (ECH -17.3%)
China is 23% of Chile’s export market and around 8% of its GDP thanks to the copper trade.
3. Korea (EWY -2.6%)
Korea has held up well despite China’s market volatility. China is responsible for 25% of Korean exports and roughly 11% of its GDP.
2. Taiwan (EWT -9.56%)
Taiwan, too, has held up fairly well despite the fact that 26% of its exports are China bound. A whopping 16% of its economic output is dependent on China.
1. Australia (EWA -13.4%)
Iron ore has made China account for 34% of Aussie exports worldwide. China accounts for 6% of Australian GDP.