Trump Is Right to Battle China on Trade, But Now Comes the Hard Part

[srinir]

Just stating facts - pump your brakes; you're sounding like Xi's PR Minister. And quit putting words in my mouth - I never tied Chinese GDP or Retail Sales or Industrial Production to tariffs in my posts.

Uh..

You asked this question
"bone said: The question is, can China withstand two years of tariffs ? If there's a US executive branch administration change that will happen in January of 2021. When you have a $419 Billion trade surplus with another country, and your Country's entire economic expansion plans relies upon maintaining that surplus along with an artificially pegged dollar float (currency manipulation) - those are golden handcuffs."

I stated the facts that their GDP won't be affected significantly because of the two years of tariffs alone. If you don't like answers don't ask questions

Who has sounded like Baghdad Bob in this thread?

 

[Stockolio]

Uh..

You asked this question
"bone said: The question is, can China withstand two years of tariffs ? If there's a US executive branch administration change that will happen in January of 2021. When you have a $419 Billion trade surplus with another country, and your Country's entire economic expansion plans relies upon maintaining that surplus along with an artificially pegged dollar float (currency manipulation) - those are golden handcuffs."

I stated the facts that their GDP won't be affected significantly because of the two years of tariffs alone. If you don't like answers don't ask questions

Who has sounded like Baghdad Bob in this thread?
View attachment 202711

Tell me, what is the composition of China's GDP ?

 

[srinir]

Tell me, what is the composition of China's GDP ?

https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

 

[Stockolio]

https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

So you don't know ? Why type about something you don't know... You have no idea how bad China's economy is doing, and even more clueless on it's extremely fake GDP. Read and learn, you'll look like less of a fool in the future with that approach.

On paper according to them, Investment represents 45 % of GDP, reality is way above 50 %. Construction which has been mostly useless for quite a number of years, accounts for 25 % of GDP by Pro China estimates... Over 50 % of their GDP is directly debt driven, consumption GDP is amongst the lowest in the world, due to extremely high Inflation... I would say Investments are 55 % of GDP, Consumption 25 % and Government 20 %. Price to Income ratio is the highest in the world in China, per income it's the most unaffordable place on earth, who would of thought non stop QE since 09 would of caused such a thing ? They are ballooning the debt while barely increasing debt servicing measures. The monetary policy leaders of China are by a wide margin the most incompetent on earth, you know you couldn't default on Corporate debt until 2014 ? Up until that point, the government no matter what paid the bad loans... It caused massive moral hazard on a scale never seen.

Nobody makes a profit in China, except maybe Ali Baba and Tencent, even their numbers are false on reporting... They don't let such a thing called profits get in the way of business, and you are seeing the results now, default wave after default, and we are still in the good times right now. I did a thesis on China, it's on ET, read it... Scary stuff

The biggest financial collapse the world will ever see, is China... You think Inflation is sky high right now ? Wait until they have to float their dollar, which they will cause they will start defaulting on US Issued debt towards end 2019. Import prices will triple over night, the consumption is already on par with extremely poor countries like Haiti, once they float, it's game over... Anarchy and chaos will rule that country, sad sad things headed China's way. Never under estimate very bad leadership, Winnie is just killing that country, he's their Donald Putin Trump

 

[Stockolio]

Watch whole video... He's a Pro China, optimistic but fair and very smart economist, I did my thesis to counter his soft landing theory, the truth is severely hard landing, worst then Argentina given the size of debt and the total amount of non productive jobs their are... The entire country is absolutely dependent on debt, there's a small amount of companies that can survive without constant loans, over 90 % bleed money and are constantly refinancing, some I am sure are at the 50th time already, it's almost becoming a joke... But it has real life consequences, the PBOC is tapped out, you are seeing it now, liquidity is tight in China right now, yet they printed around 20 Trillion Yuan in Q1 alone, where did that money go ? Debt Servicing, running to stand still. They have shifted focus from Growth to containing collapse... Almost every company in China is a Tesla, Uber or Wework kinds, constantly need new loans to cover payroll, interest and operating costs

 

[srinir]

So you don't know ? Why type about something you don't know... You have no idea how bad China's economy is doing, and even more clueless on it's extremely fake GDP. Read and learn, you'll look like less of a fool in the future with that approach.

I was answering question with the narrow scope. Question was whether Tariff's affect chinese economy? My answer was not much.

Your thesis is about entire GDP. I acknowledged in my earlier reply, it has it a rough patch along with other Emerging markets.

On paper according to them, Investment represents 45 % of GDP, reality is way above 50 %. Construction which has been mostly useless for quite a number of years, accounts for 25 % of GDP by Pro China estimates... Over 50 % of their GDP is directly debt driven, consumption GDP is amongst the lowest in the world, due to extremely high Inflation... I would say Investments are 55 % of GDP, Consumption 25 % and Government 20 %. Price to Income ratio is the highest in the world in China, per income it's the most unaffordable place on earth, who would of thought non stop QE since 09 would of caused such a thing ? They are ballooning the debt while barely increasing debt servicing measures. The monetary policy leaders of China are by a wide margin the most incompetent on earth, you know you couldn't default on Corporate debt until 2014 ? Up until that point, the government no matter what paid the bad loans... It caused massive moral hazard on a scale never seen.

I agree about their canary in the coal mine is property market, though probably disagree in some of these numbers.

Their residential property market share is about about 12%, probably yours include commercial.

agree about price to income ratio, It is some what similar to Manhattan. Margin debt is manageable, which was a issue in 2015.

Commercial property market has definitely slowed down.

To short this market first atleast you need to turn in the prices in 3rd tier markets first. But those are still rising.

Don't know how you track corporate debt there, it is certainly is a issue here in state side with spreads narrowing with the treasury's while notional amount has gone way up.

I have HYG puts and SMH puts as a hedge. HYG puts has not paid off, while SMH is in the money.

 

[Stockolio]

I was answering question with the narrow scope. Question was whether Tariff's affect chinese economy? My answer was not much.

Your thesis is about entire GDP. I acknowledged in my earlier reply, it has it a rough patch along with other Emerging markets.



I agree about their canary in the coal mine is property market, though probably disagree in some of these numbers.

Their residential property market share is about about 12%, probably yours include commercial.

View attachment 202728

agree about price to income ratio, It is some what similar to Manhattan. Margin debt is manageable, which was a issue in 2015.

View attachment 202728
Commercial property market has definitely slowed down.

View attachment 202732

To short this market first atleast you need to turn in the prices in 3rd tier markets first. But those are still rising. View attachment 202734

Don't know how you track corporate debt there, it is certainly is a issue here in state side with spreads narrowing with the treasury's while notional amount has gone way up.

I have HYG puts and SMH puts as a hedge. HYG puts has not paid off, while SMH is in the money.

HYG Puts huh... You will be getting paid

 

[SunTrader]

Thesis, lucky you can spell it.

 

[Overnight]

What I do not understand about it all is why the trade imbalance is such a big deal now, as opposed to before?

Let us start at the start of the Obama administration in 2008, the beginning of the recovery.

We had a trade deficit with China, and it grew.

We had high unemployment, and it shrank.

As people started finding work as the economy recovered, we as a people had more monies to spend. So we bought stuff.

Fast forward to end of Obama. 2017. Our trade deficit with China is "hugeish", and keeps growing. Unemployment keeps shrinking. Wages are rising. Personal spending keeps rising.

2018. Trade deficit keeps rising. Unemployment keeps shrinking. Wages are rising. Personal spending keeps rising.

2019. Trade deficit keeps rising. Unemployment keeps shrinking. Wages are rising. Personal spending keeps rising.

Now all of a sudden in mid 2019, the trade deficit is a bad thing? What would happen if this pattern kept on the way it was? I do not understand.

 

[ironchef]

Just stating facts - pump your brakes; you're sounding like Xi's PR Minister. And quit putting words in my mouth - I never tied Chinese GDP or Retail Sales or Industrial Production to tariffs in my posts.

I don't think this is fair. We have a productive, healthy discussion so let's not get emotional and let ideology gets in the way.

Peace.