Not many people listen to my #China commentary. For most, it’s deemed outside the norm. If Luke Gromen is the only one that takes these comments seriously then that is enough.

Not sure why the video didn’t load here so making another attempt. TL;DR Ford Motor CEO says he doesn’t want to give back his Chinese EV (Xiaomi SU7). “It’s amazing”.

Little surprises me when it comes to conversations centered on China, but this clip of the Ford Motor CEO discussing the Xiaomi SU7 stunned me. As someone who drives a Nio, I’ve found the Chinese EVs, while by no means perfect, to easily be the best value for consumers. Jim Farley – again the CEO of Ford Motor – goes even further. “I don’t like talking about the competition so much, but I drive a Xiaomi, we flew one over from Shanghai to Chicago and I’ve been driving it for six months now and I don’t want to give it up.” Trade barriers can be erected, but in the end it is demand which will be the ultimate arbiter of a product’s success or failure. The Americans, and doubly so for the Europeans, will need to do better. Protectionist ideologies only delay the inevitable. Nations either find a way to effectively compete or their industries face extinction. You can point the blame in the direction of state sponsored subsidies. For myself that is an issues for sure, but it isn’t the singular issue. America and Europe are just not competitive in manufacturing at scale. The Chinese are, and this – right here – is the basis for China having a competitive advantage. This is why China wins and will keep winning. All of this should be a warning. It points to the fatal flaw of the American-led strategy to deny China access to advanced software (ie. chips). The software has no value if it’s not deployed into hardware, and it is China that builds nearly every single piece of hardware on the planet. What comes first? G7 nations build out a (competitively priced) hardware manufacturing base or China develops a homegrown chip industry? I’d even go so far as to say that the ramifications of these policies are already playing out. Just ask the ASML shareholders.

To a comment made earlier, this sort of pressure continues. #China will remain very reluctant to provide any material fiscal stimulus as it runs entirely counter to the policy of deleveraging the economy. I believe that this point is known in western countries and leaders there are working overtime to press Beijing to change its approach. Why this matter is that nation-state debt is a relative game. Rising debt levels only remains feasible so long as all countries follow along, albeit at a different pace from time to time. China made the decision to take its own deleveraging path beginning three years ago. This then put pressure on Washington and Brussels. What is to be done? Make it about trade and push the argument that China, without fiscal support (debt), will reduce consumer demand and that, in turn, means higher rates of exports leading to greater geopolitical destabilization. There is some truth to all of this and I do believe that China is running a mercantilist export policy. Addressing this issue, however, requires that America and Europe most first respond to their own debt issues. We all know that this isn’t gong to happen. All that can be done is to continue pointing the finger at China. https://www.reuters.com/markets/asia/imf-chief-economist-says-lack-domestic-demand-fuels-chinas-export-growth-2024-10-22/

Coming to you soon. The fastest growing social media platform in #China. Xiaohongshu, or Little Red Book (I'm not joking). The Tik Tok killer will be another Chinese app. Ironic. https://www.bloomberg.com/opinion/articles/2024-10-21/xiaohongshu-social-media-app-defying-china-s-tech-slump?srnd=homepage-asia&sref=lgMFFI0d

This - right here - is the only “number go up technology” I care about. #hashrate And a +4% upward adjustment coming tomorrow. @Clark Moody

If this isn't a coincidence, it most certainly demonstrates that fate does have a very twisted sense of humor. The BRICS event is happening this week, the very same week that the IMF/World Bank are holding their annual meeting. One in Washington DC and the other in Kazan, Russia. This is a great piece by the SCMP highlighting the moment in time for which we are living. Tagging @gladstein because, well it just makes sense.

South China Morning Post

Macroscope | Brics summit vs IMF-World Bank meetings: the global divide is clear

The West and its institutions are deluded if they think ignoring the Global South’s demands and preserving the status quo will work.

Totally expected, but the PBoC formally moved to lower the benchmark lending rate this morning. Just a reminder that up to this point, all #China has done in terms of simulative measures have been via the monetary route. There has been zero formal shift fiscally. I remain doubtful that there will be any material fiscal support provided by Beijing and the Ministry of Finance. If you do see headlines making claims of fiscal measures, look deeper into the details. The expectation would be for Beijing to announce the issuance of large scale government bonds. The proceeds, however, of that issuance will more than likely be directed at addressing local government debt. In short, central government bonds will be used to retire local government bonds. A net zero impart to the economy.

CNBC

China cuts benchmark lending rates by 25 basis points

The move was expected. China's central bank governor indicated last week that the loan prime rates would be lowered.

As markets go, #China is a genuine anomaly. It is the world’s second largest economy. It also exhibits the very same risks of any emerging market. There’s nothing else like it and there has been, and will continue to be, excess volatility.

#China GDP for Q3 is out and it came in slightly better than expected at 4.6%. It’s all optics mind you and basically everyone just focuses on the topline data point without looking too much into the details. We are still watching play out the back and forth battle over whether the central government will finally announce some fiscal support. I remain very doubtful.

CNBC

China reports third-quarter GDP growth of 4.6%, slightly beating expectations

Beijing has faced public scrutiny over its ability to meet its own annual growth target of "around 5%."

Over the years I’ve come to understand that the word “duty” is actually better defined as one’s own nature. Not what it is that you are supposed to do, but what it is that you are inherently meant - dare I say destined - to do.

This is nonsense and quoting Blade Runner is just on a whole new level of disgusting. #China is doing the opposite of Japan. There’s been a two+ year process of aggressive deleveraging. A pain point has been reached and the foot is being eased off the break. For now. It will last only for so long.

I’m curious. Are there people out there who honestly think HODL originated as an acronym for Hold On for Dear Life?