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Paul Hodges

 
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  • Investment In Chinese Real Estate No Longer Looks 'Safe As Houses' [View article]
    Just one factual point. China's main stock index, the Shanghai Composite peaked around 6000 in October 2007, and had a secondary peak after the initial stimulus programme at 3400 in July 2009. It closed on Friday at 2054. Long-term investors have thus been losing money for quite some time in China.

    With the new leadership seemingly committed to reform, investment in "obsolete development strategies" such as real estate may therefore now be one of the worst places in which to invest for the future. My argument is simply that income levels, not wealth effects, are key to sustainable economic growth and future company earnings.
    Apr 5, 2014. 07:56 AM | 1 Like Like |Link to Comment
  • China's Lending Bubble Could Now Lead To Zero GDP Growth [View article]
    Yesterday's WSJ reported:
    “Total smartphone shipments in China fell 4% in Q4 2013. This could signal harder times for both domestic and foreign smartphone companies looking to China for growth.”
    http://on.wsj.com/1hilEGD
    Mar 14, 2014. 07:02 AM | Likes Like |Link to Comment
  • China's Consumption Boom Driven By Property Wealth Effect [View article]
    Good point. China and the US currently have very similar levels of income inequality using the GINI metric. China is 29th on the list at 47.4, whilst the US is 41st at 45.0 ( http://1.usa.gov/1mH1nBx )

    I would argue the cause is the same in both cases - that governments have focused over the past decade on boosting asset prices to create a "wealth effect". This was an easy route to boosting consumption in the short term. But longer-term, it means there has been a lesser focus on developing and implementing policies that would create real wealth and at the same time boost middle class incomes. Whilst the negative effect of 'wealth effect' policies is that they inevitably led to an increasing concentration of ownership.
    Feb 26, 2014. 04:40 AM | 3 Likes Like |Link to Comment
  • China's Lending Bubble Could Now Lead To Zero GDP Growth [View article]
    I first began doing business with China in 1987, which is also when I learnt to appreciate the achievements of President Xi's father, Xi Zhongxun, in turning Guangdong from a sleepy backwater into a global powerhouse. http://bit.ly/1mllGkv
    Feb 22, 2014. 12:04 PM | 1 Like Like |Link to Comment
  • China's Lending Bubble Could Now Lead To Zero GDP Growth [View article]
    Thanks for your comments. The chart covers 1978-2013 and uses the government's own data, there just isn't space to show each year on the axis.
    Feb 21, 2014. 09:32 AM | Likes Like |Link to Comment
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