El hilo de China

[2 años]

Otra visión sobre China (lo que los occidentales no han comprendido sobre economía moderna)

https://puntosinapsis.wordpress.com/2015/04/22/otra-vision-sobre-china-lo-que-los-occidentales-no-han-comprendido-sobre-economia-moderna-2/

[muyuu]

Sigue la fiesta. Esta semana algunas cotizaciones se reabren y creo que a este paso las volverán a chapar 

Hay guano para rato.

[muyuu]

http://www.lanacion.com.ar/1813759-cada-vez-mas-agresiva-china-amplia-su-poder-y-hace-sentir-su-peso

[muyuu]

China se ha gastado ya cerca del 10% de su PIB en mantener la bolsa.



http://uk.reuters.com/article/2015/07/23/uk-china-markets-rescue-idUKKCN0PX0AU20150723

Beijing's stock rescue has $800 billion bark, small market bite

China has enlisted $800 billion worth of public and private money to prop up its wobbly stock markets, a Reuters analysis shows, but the impact of the unprecedented government-orchestrated rescue has so far been modest.

Public statements, media reports and market data reveal that Beijing unleashed 5 trillion yuan (515 billion pounds) in funds - equivalent to nearly 10 percent of China's GDP in 2014 and greater than the 4 trillion yuan it committed in response to the global financial crisis - to calm a savage share sell-off.

But while the 2008 stimulus package staved off recession, analysts wonder what benefit the stock rescue package can bring to offset the risk the government is buying stocks at valuations private investors are no longer willing to pay.

"I'm quite negative towards the rescue," said Yang Weixiao, analyst at Founder Securities in Beijing.

"The problem is, all these measures only change the supply-demand relationship, without changing the fundamentals. So there's no real support, and the calm could be only temporary. If the governments exits the bailout, prices could accelerate their journey back to fundamentals."

Indeed, there are already some signs the government may be backing off from aggressive share purchases.

A plan to raise 100 billion yuan by China Securities Finance Corp (CSFC), the state-backed institution that provides margin financing, has been delayed, four sources familiar with the matter told Reuters on Monday.

On Thursday the CSFC admitted that it had reduced stakes in some listed companies to bring it below a regulatory threshold, but said it had transferred the shares, not sold them.

Respected private finance magazine Caijing also reported that the CSRC was considering withdrawing money from a stabilization fund, roiling markets before CSRC denied the story.

It's hard to tell how much state money has actually flowed into the market, given the opacity of some of the investing institutions.

But Beijing's policy goal is not to prop up values by buying the stock market outright, but rather to entice private money back to the market, surfing a wave of incoming government money.

"Presumably the whole point is to say that you are going to spend this money, and then by saying it you don't actually have to spend it," said Andrew Batson, an economist at Gavekal Dragonomics in Beijing.

RESCUE PACKAGE

The combined measures, rolled out in a flurry of announcements earlier this month, included a 120 billion yuan stabilisation fund created by a core group of brokerages and 1.3 trillion worth of bank loans to state-backed margin finance companies.

Potential inflows created by tweaking investment rules for pension funds amount to 600 billion yuan, while allowing insurers to invest up to 40 percent of their assets in stocks could generate an estimated 2.9 trillion yuan. ((For a table of support measures, click)).

There have also been share buybacks announced by key stakeholders, and funds invested by the state-owned asset manager Central Huijin, plus a double-barrelled burst of monetary policy stimulus by the central bank in late June that explicitly targeted stock market stabilisation.

But the response has been lukewarm.

While the market stabilised, with the Shanghai Composite Index .SSEC recovering about 20 percent by Thursday's close from a low point around 3,300 points struck on July 8, it is still below the semi-official recovery target of 4,500 points.

Beijing has thus produced the equivalent of around 1 index point gain for every $1 billion committed.

And market stability remains untested given the large numbers of companies still subject to trading halts. Reuters calculations show that around 20 percent of listed companies in Shanghai and Shenzhen are not trading at present, down from around 40 percent before but still extremely high.

An analysis by Everbright Securities of fund flow data showed that while government flows into mutual funds targeted for government intervention rose sharply in recent weeks, private inflows into new stock funds have collapsed.

The other major problem with Beijing's strategy, Batson at Gavekal Dragonomics pointed out, is that many Chinese firms are still trading at stratospheric valuations.

Even after the early-summer meltdown that saw markets shed around a third of their value in a little more than three weeks, the Shanghai Composite Index .SSEC is still up nearly 100 percent from 12 months ago, with an average price-to-earnings ratio of 17.64 - higher than the Dow Jones Industrial average P/E of 16.12.

The average P/E on the Shenzhen stock exchange .SZSA is 47.23, while the small-cap ChiNext growth board .CHINEXTC is a heady 98.07.

"If valuations are mean-reverting over time, which a lot of people think they are, that means that valuations could go down in the future," said Batson. "Which means that whatever buying the government does today could end up imposing a longer-term financial cost."

Though Chinese major stock market indexes rose on Thursday, and are now set to gain for the third consecutive week, futures markets are still pricing at a discount to current values, betting that the CSI300 index will fall back to around 4,000 points by next March.

(Additional reporting by Samuel Shen; Editing by Alex Richardson)

http://www.telegraph.co.uk/finance/china-business/11766449/China-losing-control-as-stocks-crash-despite-emergency-measures.html

China losing control as stocks crash despite emergency measures
Margin debt on the Chinese stock market has reached $1.2 trillion. 'We suspect that it’s a matter of time before banks may have to face the music,' Bank of America says

Chinese equities have suffered the sharpest one-day crash in eight years, sending powerful tremors through global commodity markets and smashing currencies across East Asia, Latin America and Africa.
The Shanghai Composite index fell 8.5pc despite emergency measures to shore up the market, with a roster of the biggest blue-chip companies down by the maximum daily limit of 10pc. The mood was further soured by news that corporated profits in China are now contracting in absolute terms, falling 0.3pc over the past year.
The violence of the moves unnerved investors worldwide, stirring fears that the Communist Party may be losing control after stoking a series of epic bubbles in property, corporate investment and equities to keep up the blistering pace of economic growth.
Brent crude prices slid to a five-month low of $53.34, re-entering a bear market. The DB-UBS commodity index fell to 2002 levels, obliterating the gains of the resource "supercycle".
The FTSE 100 fell 1.27pc to 6.497, dragged down by mining groups and energy companies. All of the year’s advances have been wiped out.
Mark Williams, chief Asia strategist at Capital Economics, said the Chinese authorities appear to have been testing the waters to see what would happen if they stopped intervening. The market verdict was swift and brutal.
“They have got themselves into a very difficult situation. They have put a lot of credibility on the line to shore up prices and this credibility has been badly damaged,” he said.
The Shanghai index looks poised to test its 200-day moving average, now just below 3,600, a crucial support level watched with trepidation by China’s authorities.

The Chinese media reported on Monday night that the state regulator is ready to intervene with yet more stock purchases. It has already bought an estimated $250bn of equities and has borrowing lines for a further $450bn if necessary.

Western banks say they are coming under heavy pressure from Chinese officials to refrain from negative comments. They are effectively gagged if they wish to do business in China.
“Large parts of the market are closed, and those stocks that are still trading are selling off regardless of support measures. Clearly something very serious is happening,” said one economist.
The long-standing assumption that the Chinese authorities know what they are doing has been shattered.
The government’s heavy-handed measures include a ban on short sales and on new share issues, as well as pressure on the 300 largest companies to buy back their own stock, and forced purchases of stocks by brokerage houses.
Many investors are effectively trapped with margin debt used to buy the stocks. These liabilities cannot be covered without selling the stocks. The longer the market remains partially frozen, the more likely it will lead to extreme stress.
David Cui, from Bank of America, said $1.2 trillion of stock holdings are being carried on margin debt. This is 34pc of the free float of the Shanghai and Shenzhen stock markets. “When the market ultimately settles at a level that can be sustained on fundamental reasons, we expect that the financial system may wobble, due to high contagion risk,” he said.
“Most leveraged positions may suffer from losses ultimately, likely in trillions (of yuan). The risk is that the unwinding of the leverage will be disorderly: due to implicit guarantees behind most shadow banking products, investors could easily panic,” he said.
Mr Cui said the brokers and trusts have barely 1.6 trillion yuan ($260bn) to absorb losses and may be overrun. “Given the particularly thin front line of the financial institutions, we suspect that it’s a matter of time before banks may have to face the music,” he said.
This in turn risks setting off a “bank run” on the shadow banking system as investors lose trust in wealth management funds, fearing that their deposits in the $2.1 trillion industry no longer have an implicit guarantee.

Bank of America said the Chinese state may have to swallow the losses from the stock market fiasco in the end but this would have a clutch of toxic side-effects.
The authorities still have a nuclear trump card up their sleeve. They could cut the reserve requirement ratio (RRR) from 18.5pc all the way down to 5pc – as in the banking crisis in 1998 – or even to zero.
This would allow the big state banks crank up lending, injecting $2 trillion to $3 trillion into the economy, putting off the day of reckoning with another cycle of growth.
Premier Li Keqiang is clearly reluctant to pull the credit lever again. One of the reasons why Beijing talked up the stock market was to try to shift reliance from debt to equity, though the policy got out of hand as margin accounts flourished.
The debt to GDP ratio has already doubled to 260pc since 2007, reaching $26 trillion, more than the US and Japanese commercial banking systems combined.
Credit is stretched to dangerous levels and is losing its potency. Wei Yao from Societe Generale said it took $2.50 of credit to generate $1 of extra GDP before the Lehman crisis. This has jumped to $5.50 as the economy reaches credit saturation. This is very little gain, at great risk.

Ray Dalio, a long-time China bull at Bridgewater, issued an extraordinary mea culpa last week, saying he had misjudged the Chinese boom and viewed the equity crash as a turning point.
“We did not properly anticipate the rate of acceleration in the bubble and the rate of unravelling, or realise that the speculation in the markets was so big by the established corporate entities, as well as the naïve speculators. We should have,” he said.
Mr Dalio said the stock market crash is in one sense a minor matter – given that most Chinese do not own stocks – but it is coming at a very delicate moment, and has been a psychological shock. The combined effects of a bursting property bubble, an equity crash and a wave of debt restructuring at the same time have reached critical mass. “Negative forces on growth are strong and self-reinforcing,” he said.
It has hit at a time when the Chinese exchange rate is soairing - due to the dollar peg - and may be 15pc overvalued.


There are still optimists. Wendy Liu from Nomura said the boil has been lanced and Chinese equities are now cheap. “This is the best time to buy. It looks like an ordinary correction to me,” she said.
She compared the sell-off to the mini-panic in June 2013, when Shibor interbank rates soared to 30pc. “Everybody was bearish on China and thought it was going to blow up. I think we are going through a similar situation,” she said.
For the rest of the world, it is a tense moment. China consumes 50pc of global coal, 43pc of industrial metals and 23pc of grains, according to World Bank data.
Brazil, Russia, South Africa and a string of commodity states face a double-barrelled stress test. The Chinese are freezing imports just as the US Federal Reserve drains worldwide dollar liquidity and prepares to raise rates, calling time on emerging markets that have together borrowed $4.5 trillion in US currency.
The Brazilian real fell to a 12-year low of 3.38 against the dollar on Monday. The South Africa rand hit a record low of 12.69. The Russian rouble flirted with the danger line of 60. It was the same story across much of the emerging market nexus.
“One by one the dominoes are starting to fall,” said Societe Generale.

[lectorhinfluyente1984]

http://www.project-syndicate.org/commentary/china-equity-bubble-correction-by-michael-spence-2015-07

NEW YORK – The problems with China’s economic-growth pattern have become well known in recent years, with the Chinese stock-market’s recent free-fall bringing them into sharper focus. But discussions of the Chinese economy’s imbalances and vulnerabilities tend to neglect some of the more positive elements of its structural evolution, particularly the government’s track record of prompt corrective intervention, and the substantial state balance sheet that can be deployed, if necessary.

In this regard, however, the stock-market bubble that developed in the first half of the year should be viewed as an exception. Not only did Chinese regulators enable the bubble’s growth by allowing retail investors – many of them newcomers to the market – to engage in margin trading (using borrowed money); the policy response to the market correction that began in late June has also been highly problematic.

Given past experiences with such bubbles, these policy mistakes are puzzling. I was in Beijing in the fall of 2007, when the Shanghai Composite Index skyrocketed to almost 6,000 (the recent peak was just over 5,000), owing partly to the participation of relatively inexperienced retail investors.

At the time, I thought that the greatest policy concern would be the burgeoning current-account surplus of over 10% of GDP, which would create friction with China’s trading partners. But the country’s leaders were far more concerned about the social consequences of the stock-market correction that soon followed. Although social unrest did not emerge, a prolonged period of moribund equity prices did, even as the economy continued to grow rapidly.

In 2008, it was a combination of exploding asset prices and excessive household-sector leverage that fueled the global financial crisis. When such a debt-fueled bubble bursts, its effects are transmitted directly to the real economy via household-sector balance sheets, with the reduction in consumption contributing to a decline in employment and private investment. It is much harder to find circuit breakers for this dynamic than for, say, that caused by balance-sheet distress in the financial sector.

Yet the Chinese authorities seem not to have learned the lessons of either episode. Not only did they fail to mitigate the risks, underscored in the 2007 collapse, that new retail investors introduce into the market; they actually exacerbated them, by allowing, and even encouraging, those investors to accumulate leverage through margin buying.

Making matters worse, when the current stock-market correction began in early June, Chinese regulators relaxed margin-buying restrictions, while encouraging state-owned enterprises and asset managers to purchase more stocks. The authorities, it seems, were more interested in propping up the market than allowing for a controlled price correction.

To be sure, China’s stock-market bubble did not emerge until recently. Last October, when the Shanghai Composite Index was in the 2,500 range, many analysts considered equity prices undervalued. Given relatively strong economic growth, rising prices seemed justified until about March, when the market, driven by mostly thinly traded small- and mid-cap stocks, shot to over 5,000, placing the economy at risk. (And, in fact, many still claimed that the rally was not unsustainable, as the stock market was trading at a forward price-to-earnings ratio of about 15, consistent with its ten-year average, in mid-April.)

But it was a bubble – and a highly leveraged one at that. While periodic bubbles may be unavoidable, and no bubble is without consequences, a highly leveraged bubble tends to cause far more damage, owing to its impact on the real economy and the duration of the deleveraging process.

This is reflected in the persistently sluggish recovery in the advanced economies today. Even the United States, which has fared better than most since the crisis, has recorded GDP growth of little more than 10% since the start of 2008; over the same period, China’s economy grew by about 66%.

Of course, with China’s household sector holding a relatively small share of equities compared to real estate, the current stock-market slump is unlikely to derail the economy. Nonetheless, as in 2007, the prospect that lost savings will trigger social unrest cannot be dismissed, especially at a time when tools like social media enable citizens easily to share information, air grievances, and mobilize protest.

As previous crises have shown, and as the current downturn in China has highlighted, steps must be taken to mitigate market risks. Specifically, China needs prudential regulation that limits the use of leverage for asset purchases. Here, the country already has an advantage: relatively high levels of equity and low mortgage-to-value ratios typically characterize real-estate purchases by China’s household sector.

Moreover, once a market correction begins, the authorities should allow it to run its course, rather than prop up prices with additional leverage – an approach that only prolongs the correction. If Chinese regulators allow the market to correct, sophisticated institutional investors with a long-term value orientation will ultimately step in, enhancing the market’s stability. In the interim, the use of public balance sheets to purchase enough equity to prevent the market from over-correcting may be justified.

As China’s markets expand – the capitalization of the Shanghai and Shenzhen markets is on the order of $11 trillion – they are increasingly outstripping policymakers’ capacity to manage prices and valuations. The only practical way forward is for the Chinese authorities to focus on regulatory and institutional development, while following through on their commitment to allow markets to play the decisive role in allocating resources.

[lectorhinfluyente1984]

Y como siempre, excelente Kike Vázquez:

http://blogs.elconfidencial.com/mercados/perlas-de-kike/2015-07-30/cuando-las-burbujas-se-confabulan_947081/

[lectorhinfluyente1984]

http://www.project-syndicate.org/commentary/china-financial-regulation-by-zhang-jun-2015-08

[muyuu]

(También lo he puesto en el hilo de infográficos)

[lectorhinfluyente1984]

http://www.xinhuanet.com/english/special/silkroad/index.htm

[muyuu]

http://www.theguardian.com/business/2015/aug/11/china-devalues-yuan-by-2-to-boost-flagging-economy

[muyuu]

http://www.telegraph.co.uk/finance/economics/11799504/China-cannot-risk-the-global-chaos-of-currency-devaluation.html

[lagarto]

Otra visión sobre China (lo que los occidentales no han comprendido sobre economía moderna)

https://puntosinapsis.wordpress.com/2015/04/22/otra-vision-sobre-china-lo-que-los-occidentales-no-han-comprendido-sobre-economia-moderna-2/

Muchas gracias 2 años. Este artículo es magnífico. Ahora comprendo cuando PPCC habla de China, de su modelo no capitalista.


No es China, somos el resto los que tenemos que cambiar el modelo o morir de hambre. 

[lectorhinfluyente1984]

A mi también me gustó mucho; aunque creo que solo es una cara de la moneda. La otra es esta:

http://brontecapital.blogspot.co.uk/2012/06/macroeconomics-of-chinese-kleptocracy.html

[lectorhinfluyente1984]

Oh la la, incluso Yu Hua opina sobre la bolsa china:

http://www.nytimes.com/2015/08/20/opinion/yu-hua-blind-faith-in-chinas-stock-market.html

[visillófilas pepitófagas]

El FMI retrasa la inclusión del yuan en su cesta hasta octubre de 2016
El Fondo valora la decisión de Pekín de liberalizar parcialmente su sistema cambiario
http://economia.elpais.com/economia/2015/08/19/actualidad/1440017158_105571.html