This is a thread on
#China
's dominant position on key components for new technologies, in particular
#EVs
. Check estimates by 2025 of
@lithium
refinery. China comes first by far, well above its mining capacity (1/4) via
@business
My reading is that
#China
not really banning exports of solar panel critical materials yet but creating export licensing requirements. Thus, China can use the world's dependence on solar panels as the US does for semiconductors.
#EU
should watch out.
How can Hong Kong not been important of it hosts 70% of Mainland companies' IPOs overseas and 60% of their USD bond issuance?. Hong Kong holds the key of the Mainland's access to overseas financing and investment
@Bruegel_org
Those claiming Hong Kong is no longer important to China don't show the full story. We need to look beyond GDP and consider China's soft spot: access to foreign capital with a relatively closed capital account - writes
@Aligarciaherrer
>>
The reality is that the
#Chinese
government will not allow the
#Hongkong
government to shut its in borders as other foreign countries would immediately follow suit with huge economic and reputational losses for the Mainland
@SolomonYue
#WTO
has just published a report with global projections. It is more than scary. Even
#China
will end
#2020
with a big recession (-4%) in the best scenario (V shape)! 🙇♀️😭. If you don't want to spoil your Easter, dont even look at the L shape😱
I have a question for
@TheEconomist
: Why do you think
#Spain
's history is more tragic than that most European countries, including your
#UK
?. Spain had a civil war but you had your own bit and many more conflicts with
#France
than we did. Spain did not enter WWI or WWII.
Shortsighted view of
#HongKong
. It is
#China
’s most important offshore platform for bond issuance as well as IPOs for Chinese companies. Furthermore, a very large share of Chinese outward FDI goes through Hong Kong. GDP size is not all!
@thenewyorktimes
In 1997, Hong Kong’s economy was one-fifth the size of China’s. By 2018, it was barely one-thirtieth the size of China’s. The mainland doesn't need Hong Kong the way it once did.
Great start for the new EU-China investment deal😎🥲 China to take counter-measure against Sweden over excluding Huawei, ZTE from 5G rollout - Global Times
#China
#April
#data
scary 😱 Retail sales down 11.1% YoY. Car sales - 30% YoY. FAI around 1.8% YoY, compared to 6.6% in March and 12.2% in January and February. Property investment -10%. Infra only 3% and manufacturing investment half of what it was in March (1/2)
I cannot believe how fast the world is changing:
#China
holding the first summit with Central Asia without
#Russia
.
#Putin
should start thinking about the unintended consequences of his limitless partnership with China while embarking in a long war .
What is really ballooning is Indian imports of Chinese goods, leading to a USD 100 billion deficit in 2022 (from USD 67 billion in 2021). In other words, shipping containers are piling up full in one direction (China India) while they need to wait empty in the other
@vtchakarova
Some thoughts for the
@FT
on Chinese consumers' expected splash of money. The reason why I would not be so positive, especially as regards overseas consumption are as follows (1/3)
The key issue about China’s piling up debt is not so much the stock (which is large but similar to US or Europe) but how short term it is. HALF of China’s bond issuance is less than a year. Loans also very short-term and account receivables massive
Remember yesterday when I said, global debt to GDP actually misleads because global debt growth has centered in China with most others staying pretty flat or falling? Here is a good graph showing that. China now more indebted than the Euro area and has risen astoundingly fast
If anybody had a doubt of where
#China
is going with
#SOE
#reform
, this clarifies it.
@SCMPNews
China cements Communist Party’s role at top of its SOEs, should ‘execute the will of the party’
While the Party gathers in a historical congress, Chinese policy banks had to intervene today like crazy to avoid an additional rapid RMB depreciation
The yuan is down 11.6% versus the dollar this year
#Chinesebanks
One more bank saved today: Hengfeng Bank this time by CIC financial arm Huijin. Not even so small RMB 1.2 trillion in assets and number 23 in China!!!
I can only think of one common thread among all actions the
#Chinese
government ongoing crackdown: "private"
private tech, private tutoring, now wealth, now private equity funds... you may draw your own conclusions
@iguardans
De vacaciones en
#Catalu
ña veo claramente la imposibilidad del diálogo. Fé ciega y desconfianza sin espacio para nada más. Banderas y lazos como escudos para defenderse del que pueda tener otras ideas. Por mi parte, sentimiento de exclusión y pocas ganas de volver. Triste
I have a kind request for
@orfonline
as organiser of
@Raisina2023
: don’t offer a platform for an invading nation;
#Russia
, without checks&balances.
#Lavrov
’s aggressive words were expected but you,as organiser, has not offered any room to
#Ukraine
or others to replicate
"EU foreign ministers are expected to discuss the issue at a regular meeting on Friday. A spokeswoman for the EU’s executive Commission said it was too early to say if the bloc would consider sanctions against Beijing."
What do think the EU 🇪🇺 will do?
Russia will support the referendums in Russian-occupied Ukraine. ✅
Putin announces "partial mobilization" in Russia. ✅
Putin uses the "nuclear blackmail" card. "If its territorial integrity is threatened, Russia will use all the means at its disposal. This is not a bluff." ✅
#coronavirus
Quite frankly, I fail to understand why the largest manufacturing power in the world cannot produce enough masks. It is light and uncomplicated item and easy to transport. I may be missing something about the logistical difficulties. Or else, can masks be imported?
As a
#Spaniard
who has lived in rich cities on three continents, the problem is not
#Britain
but the answer is
#Spain
(all
#Southern
#Europe
): thirst for socializing, enjoying but also suffering with others, being human. This is what makes our cities thrive
@TomMcTague
This is exactly the question I asked myself travelling through northern Spain this summer. How come a place apparently poorer than Britain—and certainly poorer than south east England— *felt* so much more prosperous, with pleasant, clean and busy town centres packed with…
China just restricted entry for foreigners.
The WHO did not recommend ANY SPECIFIC HEALTH MEASURES for travelers from Wuhan on 11 January 2020.
Also says that entry screening offers little benefit.
It says also to NOT restrict travel to out break areas as late as 27 Feb 2020.
#Russia
's debt cut to
#junk
by
#S
&P. There are some 54 billion in
#Eurobonds
... Russian markets cannot open tomorrow nor can banks. I hope somebody in Moskow realizes.
While
@EmmanuelMacron
and
@vonderleyen
are in
#Beijing
, China announces it is considering export bans of technologies used to produce high-performance rare earth magnets deployed in
#EVs
, wind turbine motors, etc...
China's retaliation against the
#US
includes no more climate talks?? I thought climate was a common good. One more sign that
#China
's retaliatory toolbox includes climate. The
#EU
should learn from this.
@StuartKLau
China’s new 8 measures against US:
1 No more communication btwn military theatre leaders
2 No more Ministries of Defence working meetings
3 No more maritime security dialogues
4 No more illegal migrant repatriation
5 No more criminal justice assistance
6 No more climate talks
Top
#Chinese
scientists outlined the country's plan to circumvent
#US
chip
#sanctions
for the first time, namely amassing a portfolio of patents that govern the next generation of chipmaking. My question is: is so easy, why it has not happened yet ?
What a difficult year, the beginning of a realisation that a different world is awaiting us in 2019. I realise how privileged I have been to have lived in a pieceful, prosperous and globalised world for 50 years. I hope my kids are ready for a fragmented and unstable world.
#Coronavirus
#Stock
#Markets
are so short-sighted. Stocks tank only when there is a fear of a global spread of the virus. As if the Chinese economy were not big enough to have warranted a collapse in stock prices weeks ago!
The growing international role of
#RMB
since the war in
#Ukraine
is not materializing:
#RMB
international settlements are down after a spike in February and the same is true for
#CNH
deposits in
#HK
. Plus, the worst is yet to come given the sharp
#RMB
depreciation
#China
has been piling up
#wheat
quite aggressively: it now stores 142 million tons of wheat. By comparison, only ten million tons have been stored in the EU. The People’s Republic’s stockpiles account for over half of global stocks🧐🧐
@china_table
Whoever thought the world would suffer
#stagflation
as a consequence of
#coronavirus
probably got it wrong. hTe problem is collapsing demand and not so much supply.
#China
's auto industry is a very good example: production is back but no need to produce cars which cannot be sold
#China
#banking
: Hengfeng Bank is getting a 100 billion yuan ($14 billion) state bailout which is diluting Singaporean shareholder
#UOB
from 13% to 3%. Other foreign investors looking into China's financial opening are probably shocked
The most serious consequences of Covid19 will indeed be on the divide between those children/adolescents who managed to save their education and those who did not. Huge challenges ahead for income distribution/social peace. Sad, if not drammatic
@Trinhnomics
I worry about the kids that have to stay at home & the single parents that go to work & leave their kids at home & the parents that can’t help their kids with remote learning & the home that’s not fit for learning.
Kids staring at the screen all day long w/o seeing other kids.
So while China invests in Europe's South, Germany reduces its indebtedness by €53bn. Sad to see that Germany does not know how to better use its excess revenues rather than bring down debt that pays negative interest rates. via
@SPIEGELONLINE
In other words, de-risking is not only about imports from China but requires a good knowledge of China's outbound FDI and participation in global value chains since we need to know what intermediate goods create the bottlenecks and aim at those, not at all (4/4)
@thorstenbenner
For the battle of narratives to be fair, you need to have the same opportunities.
#Borrell
was given minutes in a panel,
#Ukraine
not even there.
#lLavrov
one hour shouting and insulting. It says a lot about organisers, to my dismay
#China
#banking
: Great way to limit systemic risk!. The reality is that China's approach to deleveraging is to create new leverage while putting the bad loans created by previous leverage under the mattress. End-result is an increasingly low return on assets
“To meet Beijing’s lending target, banks are forced to work with riskier borrowers.”
I’ve long argued that because real, sustainable demand is so weak, banks can only expand private sector lending by lowering lending standards and...
via
@financialtimes
I have a question: where is the
#WHO
?. Why did it take them so long to visit
#Hubei
?. What are they doing now? Why isn’t more info on success cases like South Korea, Singapore, Hong Kong and Taiwan shared?
After yesterday's announcement of China's increasingly negative
#producer
#prices
for June, the phantom of 2015 over capacity is back. The main reason is not external demand, but domestic demand. Let me use two important examples for what is happening (1/5)
#Brazil
’s central bank more than quadrupled its
#yuan
reserves in 2021 while trimming its dollar and euro holdings. With China accounting for 28% of Brazil’s trade, more than twice that of the US, it basically makes sense, except for the fact that the yuan is not convertible...
I have a question: what will happen to the European
#car
#industry
, and related employment?. For a hint, check
#Geely
's decision to produce all of
#Volvo
's EVs in
#China
?
#China
’s economy must be in really bad shape based on government’s announcement of record bond issuance and bigger fiscal deficit than in 2022. With a natural rebound from zero-Covid policies, no additional fiscal stimulus should be necessary, in principle…
The history of the
#G20
is simple: in 2022 you take a "zero" out and you end up with
#G2
: Russia and China. At the same, time, a selected but relevant group move to a renewed
#G10
of like-minded actors!
@vtchakarova
Finally somebody (international chamber of commerce) says this loud and clear :
#China
zero Covid policies at the heart of supply chain disruptions China’s zero-Covid policies causing ‘major’ knock-on effects for snarled global supply chains
Mi columna para
@el_pais
sobre las consecuencias económicas globales de la crisis en el Estrecho de
#Taiwan
: la más importante - más allá de la posible escasez de
#semiconductores
- es la gran bofetada que supone para la
#globalizaci
ón
#China
has just announced a reduction of the USD weight in the PBoC basket,
#CFETS
, a clear sign that the
#RMB
will not follow the USD if it strengths further
Regarding
#Germany
's dependence on China, former Environment Minister Juergen Trittin argues that
#Volkswagen
is currently massively reducing its dependencies unintendedly because its market share is rapidly disappearing... via
@China_Table
Let's not get this wrong:Taiwan 's export orders do not point to global trade bouncing back. Look at the very poor Japan's export data in March. It rather points to export substitution away from
#China
, in this case as a consequence of re-shoring of
#Taiwanese
corps
@Trinhnomics
Taiwan export orders up!!! & Taiwan data continues to outshine the region w/ PMI above 50 & export orders positive entirely on electronics as everything else down!
Chips = new essentials??
For those who want to know how important is
#Hongkong
to the Mainland, check this out: 50% of equity finance of Chinese financial institutions and real estate developers comes from Hong Kong!!
On average more than one third for all Chinese companies. Hard to play around with this
#Germany
#China
: After this response from the Chief Editor of BILD to President Xi, I doubt relations can go back to normal.
#Covid19
's impact on China's image really a rollercoaster: from horrible to great getting back to horrible again 😱
Can
#China
's financial infrastructure help
#Russia
avoid Western
#sanctions
?. To me, it can offer a small respite in the short run but no more.
#CIPS
still on
#SWIFT
and not liquid.
#E
-CNY still not used cross-border. Also, RMB in circulation is less demand for fledging ruble.
Chinese regulators considering pressing data-rich companies to hand over management/supervision of their data to third-party firms if they want U.S. stock listings as part of Beijing’s scrutiny of private sector firms. As if the
#US
regulators could accept this. Dead end.
Post-party hangover for China markets 😅😱
Offshore Yuan reached 7.3 to the dollar, all time low since it started trading in 2010 and the Hang Seng Index collapsed. Enjoy
Chinese households' may have piled excess savings but have lost wealth as 80% is locked in real estate and housing prices have plummeted. Also, the stock market has done much more poorly than Western stock markets did before the reopening so the wealth effect is negative (2/3)
#Chinese
officials worrying about delisting: The crown jewels at risk
#Alibaba
and
#Baidu
but still not fully agreeing to accept US accounting standards!
Rumors of a
#consumption
tax in
#China
hitting
#luxury
sector, globally which is especially bad news for Europe. Dear foreign investors: welcome to Common Prosperity!
#TSMC
’s suppliers reportedly revealed that TSMC’s capex will be over US$40bn in 2023, paving the way for it to fulfill the 3nm orders to come from Apple, Intel, AMD and Nvidia during 2023 and 2025, strengthen its presence at the 5G and HPC sectors... what a company!
If you think
#HongKong
is not important for
#China
just a reminder that more than China’s has been buying the world through HK (over 60% of Chinese M&A overseas
Those claiming Hong Kong is no longer important to China don't show the full story. We need to look beyond GDP and consider China's soft spot: access to foreign capital with a relatively closed capital account - writes
@Aligarciaherrer
>>
Why are people surprised by
#Mercedes
-Benz’s statement of impossible decoupling with nearly 10 % of its shares in the hands of a
#Chinese
state-owned automaker,
#BAIC
? “ Mercedes- Benz’s chief says cutting China ties would be ‘unthinkable’
China's return on assets have been coming down to close to 1% which is lower than most Emerging Markets and clearly low for a country which is growing 8% in nominal terms. Any doubt about the productivity of China's investment?
debt can be productive or it can be unproductive... it all depends on what assets are created or not against them... lesson from Milton Friedman at my May 1989
@uhmanoa
India perestroika conference
China's inflation data today is really worrisome (only 1% YoY). It points to weak demand. Core CPI was also lower (0.6% from 1%). Food & energy prices driving down China's inflation but, still, it is just surprising that not even the reopening creates inflation in
#China
#Lula
’s flawed analysis: “why can’t we trade in our own currencies?”. As if the
#RMB
was his currency 😅🥹 Brazil’s Lula calls for end to dollar trade dominance via
@FT
#ECFR
offers a worrisome survey about the Global
#South
' s opinion about the war in
#Ukraine
. The
#West
is really failing in its communication strategy.
My take-aways from
#Biden
-
#Xi
face to face encounter on
#Taiwan
: 1. Xi does not want to go to war just now but it want Biden’s assurances that the US will not push. 2. At the same time, Xi will toughen his stance with more and more red lines aiming at isolating Taiwan
I have lived in many countries in
#Europe
and love all of them. I have always thought that the
#EU
project was the most beautiful thing which we
#Europeans
could have done to move forward after
#WWII
. Since the last
#EUCouncil
meeting, I simply cannot think of any thing else. 1/2
When I wrote this piece on trade deglobalization trends for
@bruegel_org
, the pandemic had not yet hit the world. I received negative comments saying that supply chain reshuffling and deglobalization would not happen given the level of interdependence...
Thread on China's vanishing demand: reasons and consequences
@nytimes
NYT today with
@KeithBradsher
discussing the gap between demand and supply in China. Clearly on point. As for the reason, it is not only frugality but a terrible job market (1/3)
The new realities of
#German
automakers! competition from China in their own domestic market and with its own models (or so they claim) and this is the last German sector pushing for engagement with China. Soon no more. See below news from
@china_table
I am sharing with you a recent policy report published by
@Bruegel_org
and co-authored with Robin Schindowski on the deteriorating image of
#BRI
globally.
I am ok with the lack of agreement, we are all going through difficult times, but that insulting moral standing from the
#Netherlands
is something I will never forget.
#Dutch
people: please choose other politicians. You do deserve much more.
So an ownership mapping is needed as rules of origin do not work anymore. Vietnam is a very good example. This includes ownership of companies in Europe (3/4).
Here is one more worrisome fact: four not so small banks have either been intervened directly by PBoC (Baoshang) or participated by large state-owned commercial banks like Jinzhou and, more recentlyHarbin bank. Large banks will pay a price
There are multiple signs of strain in China’s financial system right now.
- Runs on rural banks
- An unprecedented SOE debt restructuring
- Rising consumer leverage
#China
’s
#money
and
#credit
data for July is out and it is really poor. Household and corporate loans both grew much slower than in the past. Even local government bond issuance is slowing down after June's frontloading of issuance. This is a bad signal for Q3GDP growth (1/2)
#China
has never been so dependent on
#export
markets as now: From Jan to April, China’s excavator sales dropped 56.1% domestically but increased by 78.9% in foreign markets.😱. We have been reviewing what this means for global inflationary pressures