Beijing Behavior

While Beijing was to release its GDP data today, it’s been postponed indefinitely. Hours before that announcement, China’s top planning agency said growth had “rebounded significantly” and remained “outstanding”. A raft of other economic data was also suddenly and indefinitely postponed. These delays are all you need to know about the current condition of the … Continue reading Beijing Behavior

Beijing Battle

The direct effects of the China-US trade spat on the US are small. It’s secondary effects, like weakening global growth, declining equities, Chinese retaliation, and falling US consumer and business confidence leading to reduced capital investment that’ll hurt. Moreover, the newest potentially tariffed Chinese imports are consumer goods, and US consumer spending drives growth. Collectively, … Continue reading Beijing Battle

Beijing Blooper

Despite the cost, China continues propping up its overvalued currency. It does this by selling dollars and buying yuan. In this process, the Chinese money supply shrinks, making growth more difficult, China burns through its foreign reserves, which have already shrunk from $4 trillion to $3.22 trillion in 22 just months and exports suffer. Letting … Continue reading Beijing Blooper

Beijing Booboo

With half of Chinese-listed companies having suspended trading, with short selling prohibited, the Chinese Central Bank giving money to firms to buy shares, and the government relaxing rules on mortgage borrowing to encourage stock purchases, it’s clear the Communist Party is panicking. But controlling markets is a fool’s errand, and if equities stay overpriced, these … Continue reading Beijing Booboo

Bigger Beijing

According to one measure, later this year China will overtake the US as the world’s largest economy, a spot held by the US since 1872. The measure used is purchasing power parity and it’s highly subjective and assumption laden. Worse, Chinese data can’t be trusted. That said, even using exchange rates the US is only … Continue reading Bigger Beijing