https://risksandreturns.com/category/china/ In search of asymmetric trading opportunities… en-US https://risksandreturns.com/2014/08/03/china-no-longer-a-2014-risk/ https://risksandreturns.com/2014/08/03/china-no-longer-a-2014-risk/ Sun, 03 Aug 2014 14:42:07 +0000 In a recent post, I discussed how the current slowdown in the Chinese economy posed a near term risk for global financial markets. However, I am now finding myself less concerned as the improvement in recent data along with increasing government support and accelerating growth in bank lending suggests that the economy could be stabilizing. https://risksandreturns.com/2014/05/29/china-could-scare-markets-this-summer/ https://risksandreturns.com/2014/05/29/china-could-scare-markets-this-summer/ Thu, 29 May 2014 20:05:00 +0000 As I explained in a previous post, China has a massive credit bubble that inevitably will deflate. Almost always the onset of debt deflation causes a market panic as disappointed investors run for the exits fearing falling asset prices, bankruptcies, and a sharp economic slowdown. I believe there is an elevated risk that China could face a Minsky moment in the coming months. https://risksandreturns.com/2014/05/19/chinas-growth-will-slow-for-years/ https://risksandreturns.com/2014/05/19/chinas-growth-will-slow-for-years/ Mon, 19 May 2014 17:03:06 +0000 While China’s economy has slowed down from over 10% in 2010 to 7.4% last quarter, economists unanimously believe growth will soon bottom around 7% and maintain that pace for the next several years. As I will discuss, China’s economy is structured in such a way to make that forecast implausible. More likely, China will continue to decelerate for a few more years after which growth will bottom in the low single digits. https://risksandreturns.com/2007/08/15/how-big-is-the-bubble-in-chinese-stocks/ https://risksandreturns.com/2007/08/15/how-big-is-the-bubble-in-chinese-stocks/ Wed, 15 Aug 2007 09:53:52 +0000 To get a sense of how big China’s current stock market bubble is, I have gathered some facts reported by Bloomberg: https://risksandreturns.com/2007/05/22/chinas-rate-increases-are-futile/ https://risksandreturns.com/2007/05/22/chinas-rate-increases-are-futile/ Tue, 22 May 2007 09:59:46 +0000 Yesterday, Chinese stocks ignored a rate increase and rose to a record high. It marked the fourth time in a row that Chinese share prices rose on the first day after an interest rate increase. The Chinese authorities are attempting to cool down what is clearly an overheated economy and stock market. https://risksandreturns.com/2007/05/09/the-shenzen-composite-and-nasdaq/ https://risksandreturns.com/2007/05/09/the-shenzen-composite-and-nasdaq/ Wed, 09 May 2007 10:05:07 +0000 I just noticed an Economist article published a couple of weeks back that underscores the current craze in Chinese equities. https://risksandreturns.com/2007/02/28/some-thoughts-on-yesterdays-stock-market-panic/ https://risksandreturns.com/2007/02/28/some-thoughts-on-yesterdays-stock-market-panic/ Wed, 28 Feb 2007 13:00:52 +0000 Yesterday a 9% tumble in China’s stock market spread across the world causing the Dow to fall by 3.3% and many emerging markets to decline by even more. It is difficult to determine exactly what triggered the Chinese market sell off, but there were rumors circulating that the government will be introducing a capital gains tax. https://risksandreturns.com/2007/01/26/should-china-be-worried-about-inflation/ https://risksandreturns.com/2007/01/26/should-china-be-worried-about-inflation/ Fri, 26 Jan 2007 10:23:09 +0000 During 2006 China’s GDP grew by 10.7% vs. 10.4% in 2005. As I have discussed previously, China will continue to experience hyper-growth as long as US consumer spending does not falter. However, this looks like a low probability scenario given that the US housing market, which played a large part in boosting consumer spending during the last 5 years, is clearly in a recession. https://risksandreturns.com/2006/10/29/the-china-growth-myth/ https://risksandreturns.com/2006/10/29/the-china-growth-myth/ Sun, 29 Oct 2006 10:28:51 +0000 The Chinese growth story has received an enormous amount of press in recent years. Indeed, after a lull during the late nineties, China’s economy began to accelerate growth in 2002 and has been averaging 10% since then. It is now the 4th largest economy in the world after US, Japan and Germany. https://risksandreturns.com/2006/09/27/another-yuan-revaluation-imminent/ https://risksandreturns.com/2006/09/27/another-yuan-revaluation-imminent/ Wed, 27 Sep 2006 10:39:12 +0000 Recently the yuan has picked up its pace of appreciation against the U.S. dollar. Over the past week, the yuan has appreciated by 0.5% against the dollar and its current rate of 7.90 is the highest since its revaluation in July of last year. I believe this is setting up the stage for another revaluation before the end of the year.