And to think that this, below, was making the rounds on social media two years ago today.
Peter Alexander
npub1yy3u...kawc
China 30 year veteran
Joined Nostr at block 777177
Damn. Pic didn’t upload.
Here. Peace and joy.
Picked the perfect week to go on holiday with my far better half.
Nothing better than Phuket off the beaten path.
Once again, zero fiscal stimulus out of Beijing. Ignore the headlines and all the talking heads that focus entirely on the top line number.
As expected, what was announced was a massive local government debt restructuring program. The priority is to clean up “shadow banking” finances.
Left pocket is just paying the right pocket. Zero stimulative effect.
China announces $1.4 trillion package to tackle local governments' 'hidden' debt 
CNBC
China announces $1.4 trillion package over five years to tackle local governments' 'hidden' debt
Authorities in Beijing have ramped up stimulus announcements since late September in an effort to bolster its flagging economy.
Looks like Asian trade a pointing to a Harris win over Trump.
This is some pretty strong numbers out of the markets heading into Election Day
Pay attention. There’s a rather big meeting among #China’s leadership this week and will conclude on the 8th.
Expect blaring headlines of some massive “stimulus”. Upwards of Rmb10tr. Also note, however, that this isn’t actually stimulus.
Whatever number is announced, assuming there is one, will be for funds applied to (1) a bank recapitalization program and (2) expanding the debt swap program among local governments.
This provides net zero economic support. Deleveraging remains the priority even if one type of debt is being recirculated into a new type of debt.
CNBC
China gears up for a big week as markets await U.S. elections and stimulus details
The size of China's highly anticipated stimulus plans will likely depend on the outcome of the U.S. presidential election, analysts say.
I realize this is from the Atlantic, and there's a very clear agenda, but these sorts of headlines and articles are very unhelpful when providing commentary on #China.
The continued determination to find errors in how the Chinese government is enacting policy, both domestic and in foreign affairs, undermines the real issue at hand.
The Chinese leadership fully understands what plagues the G7 "rules based order" and is working overtime to (1) protect itself from the inevitable fallout and (2) doing its part to hasten further instability.
America, and its allies, need to understand this rather than making claims that China has sown the seeds of its own destruction. This is objectively false.
The Atlantic
Xi May Lose His Gamble
North Korean troops are in Russia. Is that really what’s best for Beijing?
There will be many more examples similar to this one. Many more. Second order effects are real. More to the point - and this needs to be better understood - when you have a competition between low time preference nations and high time preference nations it’s not all that difficult to determine who will win out in the end.
And to think that tariffs are seen as the solution…..
American commercial interests need to fundamentally evaluate their competitive position vis a vis China. It’s is very clear that this sort of exercise has yet to be conducted and (unironically) the CEO of Skydio demonstrates this point spectacularly.
Not only was this individual instrumental in driving the bill to restrict DJI access to the American market, he now has the nerve to petulantly protest when those actions prove to be directly, and adversely, consequential.
He had to have expected - given the risks to his supply chain - an outcome such as this. It’s like page 3 of the standard China 101 playbook. High time preference vs low time preference.
Competitive advantages achieved on the back of favorable government regulations - alone - are simply not sustainable. Your product and/or service has to demonstrate value to the customer. For American manufactures this point has clearly not landed yet. And time isn’t on their side.
TechCrunch
US drone maker Skydio faces battery squeeze after Chinese sanctions | TechCrunch
America’s supply chain vulnerabilities were on full display Thursday after drone manufacturer Skydio told customers it was facing a battery squee...
So Arthur Hayes has entered the chat. Damn long piece and if anyone out there knows the man, have him reach out to me when he has time.
While his analysis of how #China reached this point of pain is very accurate, his expectations of what will occur next is somewhat wide of the mark.
Having said that, he isn’t wrong that the P2P market in China is alive and well. Can attest to this from my own experience.
On the plus side, it’s lovely to see how Western Union is getting smacked around.
It's new week for those of us in Asia.
And starting things off with even more uncertainty all thanks to the Japanese voters. LDP lost its parliamentary majority. Looks like pressure on the Yen will continue (and higher for the DXY).
CNBC
Japan's Shigeru Ishiba suggests he intends to stay on as PM after ruling coalition loses majority
It is the first time since 2009 that the Liberal Democratic Party has lost its parliamentary majority.
There we have it. The NPC Chairman meeting finally took place today and why this is noteworthy is that this meeting is a typically required precursor before the NPC standing committee meeting can convene.
I’ll get to the why this NPC standing committee meeting matters shortly. Before doing so though, there is the issue of “timing” that must be discussed.
It might very well be nothing, but these meetings almost always occur during the second half of October. What we learned today is that the NPC standing committee meeting is now set to take place between Nov 4th and 8th. I’m not one to believe in coincidences so the timing is clearly meant to align with the American election. Whether this will impact the NPC decision making process isn’t known, but it is rather obvious that Beijing wants the benefit of weighing the outcome(s) of Harris v. Trump.
Now, what about the NPC standing committee meeting itself.
There are heady expectations as there’s been a great deal of commentary in both traditional and social media in terms of what, and to what degree/size, there would be additional fiscal stimulus. What we now know is that the publicly released agenda for that meeting makes zero mention of any such discussion.
Fret not. This doesn’t signify that there’ll be no discussion over fiscal support.
If you were to look to last year, it was the very same set up. When the agenda was announced, there was also no specific line item for a fiscal support discussion. And yet, when the meeting concluded it was announced that an additional Rmb1.0trillion of new government bonds would be issued.
I would very much expect the same outcome this time around. Do be careful though. Any such announcement isn’t likely to conform anywhere close to what the global China punditry has been pressing.
The outlook should be for an announced Rmb5-7trillion in new bond issuance. Critical though is where the proceeds will be allocated. Around Rmb1.0trillion is almost certain to be announced with the purpose of being deployed to recapitalize the large State-Owned banks. Another Rmb5.0trillion, however, will likely be earmarked for the specific purpose of local debt restructuring. See this for what it is. A debt swap and not fiscal stimulus.
For local investors, it has already sunk in that Beijing isn’t about to reverse course on its priority of deleveraging the system. No one in China any longer expects Beijing to unleash a material fiscal support package. I can’t say the same for global investors. Their collective and unrelenting obsession over China stimulus seems to know no end. This group should prepare accordingly.
I’ll just head into the weekend knowing that my thesis of Keynes still remaining Dead in China holds firm.
You see a headline like this one and you have to stop and wonder ….. hmmm maybe Xi Jinping is on to something.
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