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China in a Bubble?

CHina Interest-

"The property market is a massive bubble - there are literally thousands of empty residential building throughout China, from 1st tier to fourth. Take a look at night at all the buildings without lights on."
What you write is true, but does not explain the full picture. The reason for the empty buildings is that there has been a build-out of large high-end luxury apartments. Most folks that can afford these buy one to live in, and several for speculation. As housing prices drop and/or lack of buyers, they are content to sit on the empty property rather than take a loss, and are not buying more. However, there is a supply shortage of new "normal smaller sized apartments" the kind the average worker wants and can afford, which in turn pushes up the price of smaller and second hand apartments. From the developer's view, luxury apartments make more money so that is what they build. An analogy for this dislocation would be if all of the sudden the only new cars available for purchase were ferarri and mazerati, hence the problem. This problem will only go away with more government-subsidized affordable housing projects.

A123: Investors Are Forgetting the Fundamentals

China digital technologies (formerly CHID) has a rather sordid past, only recently rebranded with a new ticker and soon to be new name. Seemingly formerly solid company that has been torn apart by seemingly fraudulent management (shell businesses moving around). No, not a basher, but I did own the stock when all of a sudden they sold off the lithium division in a trade to gain a carved wood idol business. Now, somehow they have the lithium business back. That's the reason for the lagging price. Soon they will have a new name along with the new ticker symbol and their past may be forgotten. I advise new shareholders to do their DD. Perhaps the company has changed.

Must Read for China Investors: Fact and Fiction in China

Yet another armchair analysis from across the world. I would advise the author to go to China and see for himself that he is off-base.

Is China the Next Great Bubble?

There is a China bubble coming, but the author has misidentified it. The coming bubble will inflate months down the road, when the rest of the world sees China continuing to hum along and grow as countries like the US continue to slide and stagnate. The gigantic sums on the sideline will begin to flow into China as FDI, and once the spigot is opened full-bore an enourmous bubble will follow.

Shares Could Be Signaling an Upward Turn for Chinese Economy

My advice is just the opposite of stay diversified regarding China. Certain Chinese sectors will rebound even as others languish and suffer. Do your due dilligence and if you are confident in your analysis, put your eggs in the basket you believe is strong.


On Feb 06 04:37 PM myWealth.com wrote:

> It's very hard for the average individual to invest in Chinese individual
> stocks and know what they are getting into. I'd suggest sticking
> with CAF (the ETF) or another ETF (seekingalpha.com/symbo...).
> My preference is the former.
>
> I'd always stay diverse in China and never isolate my money to their
> individual stocks or even just one sector over there...since people
> have such a hard time getting data from outside of China.
>
> Until they develop further and also have less controls on information,
> I'd stick to that game plan of ETF investing in China.
>
> You might ask a broker like Interactive Brokers that deals in so
> many international markets how to invest in their auto industry.
> But I'd never suggest doing so. Stay broad and diverse.

The Year of the Ox Arrives in China, Land of 'Currency Manipulation'

Not sure which bank you are using in China, but I have made one time withdrawals of over 100,000 from single accounts at both the Bank of China, and Industrial & Commercial Bank of China, in the last couple of years and as recent as last month; they do not have daily limits on withdrawals.


On Feb 02 10:41 AM hazenyc wrote:

> i think he is implying the daily ATM limit is in place to prevent
> mass withdrawls a la A run on the bank...
> You can go inside and cash out ur account in a cashier's check the
> ATM limits are in place to: prevent most people from accidentally
> withdrawing too much money from their measley checking accounts..
> and to ensure the machine doesn't run out of money!

Chinese Youth Will Propel Economic and Political Changes

The author of this article clearly knows what is going on in China; it concurs with my own "on the ground" observations. It amazes me how many posters have commented negatively on his article, who clearly have never been to China. Probably the same bitter financial experts who didn't see the current real estate or financial crisis coming.

China Is Looking Fragile

At least this blogger lets you know in advance he doesn't know a lot about China before he waxes on about how it is here. There seems to be a rash of china experts who blog about what is happening in China from their local midwestern Starbucks, or in this case, Panera. IF you are going to pretend to be an expert why not actually go do some on the ground research and get it right...

It's 1974 for the U.S., but 1929 for China

I am in China. It is obvious this author is not. I, too, along with other posters are curious about how this article got published here, and it questions the credibility of this site.

GM Must Die

The perfect solution to an imperfect situation would involve Obama's new "auto industry czar" overseeing a GM bankruptcy, the beginning of a universal health care with the newly unemployed and retirees being brought first into the fold, and government bailout money and managerial assistance in overseeing the now bankrupt GM's assets being sold and divisions merged into profitable companies such as Honda and Toyota (which are operating profitably in the states) or VW, BMW, or other companies that want to expand into the US market, in a timely manner in order to shore up job loss and tax revenue. Difficult, yes, impossible, no.

Why I'm Worried About China

As more and more China doom and gloom articles like this, written by people with seemingly no China experience or knowledge (business or otherwise), are appearing in media outlets, it only reinforces my opinion that chinese stocks are oversold and finding a sound bottom. I am glad I am heavily invested in China at this time and will continue to add to positions. It's only a matter of time before the herd money is channelled back into China.

Opportunity to Sell Into China's Illusory Stimulus Package

This author, it seems, can't see the forest through the trees. He is correct in saying that the stimulus package is largely illusury, but his conclusion is faulty. The stimulus package is illusury in the sense that many of these projects, as the author stated, are already works in the pipeline. So, in essence, the Chinese government has labeled infrastructure projects that have already been planned as stimulus. This functions to reassure the world that the Chinese government will continue to invest large amounts of money on future growth even amidst a current downturn of manufacturing. It also serves to reassure investors in the chinese stock market, supporting the index. You must also keep in mind that as governments around the world infuse money into systems where large amounts of "paper" capital have vanished, in order to insure ongoing operations, the Chinese government's money spent is going into real concrete products, that will serve to create even more capital in the future.
Of course, short term rallies will offer opportunity for profit taking in such a volatile market, on this point the author is also correct. However, it would also be wise to take a long term investment position as well as a trading position in China at this time.

China Slowdown: Biggest Test For Communist Government Yet

While the WP article is probably accurate, so far the chinese dislocations are relatively geographically isolated. And, as the was articulated in the WP piece, the government is open about its actions, and is acting in a rather quick fashion. This is not to say that there won't be contagion, but I think it will be relatively controlled, at least in the short term. As someone who lives in China, I, and my network of contacts in China, have yet to see any financial problems in our areas. In fact, I see people that were tight with money last spring due to high inflation, openly spendng on mid to large ticket items, with recently increased discretionary income.

Get Ready to Buy Like It's 2002

You are wrong on China. It is obvious you have not been there to see what is happening. China is not Russia. It is the last large economy to feel the world downturn and will be the first to shoot out of it. The government has many macro and micro tools yet at its disposal, and they are still ahead of the problem. There will of course be some dislocations and adjustment (mostly in export/shipping related industries), but they will be relatively isolated. Most export companies are already shifting their focus and adapting to other markets. Those that do not will go under or be consolidated, which will be good for the long term health of the Chinese economy. Companies with sound financial positions will continue to experience growth as the US markets rise a bit then stagnate for years to come and the hot money will follow the results. You should be in CHina now, but smart about it.