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Old 07-10-2015, 02:36 PM   #61
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OK. I cannot fathom this Chinese stock volatility to make money out of it. I have not lived under a communist regime to be able to figure it out.
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Old 07-10-2015, 03:05 PM   #62
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I understand the market has been rigged fixed like we did in 2009 and it won't go down anymore.
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Old 07-10-2015, 07:07 PM   #63
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As most, I often see shoddy Chinese products. It's not because they are not capable of doing better. I think it's because they compete fiercely on price, and need to cut every corner.
I'm probably dating myself, but I remember a time when "Made in Japan" was an emblem of shoddy work and poor quality. Japan sure turned that ship around and there is no reason China cannot do the same. They are certainly capable of producing quality products.

Then too, the Japanese thought price was the only issue that mattered but then they realized there is more to the equation than that. I'm sure China will figure it out eventually too.
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Old 07-10-2015, 08:00 PM   #64
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You are wrong Hukou started with communist regime. From Soviet to Vietnam. Only after the communist taking over. It was the only way for people to get their rations, a brutal way for the gov to control people. I was there. No communist in any form for me. Thanks.

No. I am not wrong with respect to start of hukou. In fact it existed before the party took power in china. The Kuomintang also required a household registry.

In fact, the foundations of hukou or household registry have existed for centuries. See wiki https://en.m.wikipedia.org/wiki/Hukou_system under the history section for some insight.

According to the Examination of Hukou in Wenxian Tongkao published in 1317, there was a minister for population management during the Zhou Dynasty named Simin (Chinese: 司民), who was responsible for recording births, deaths, emigrations and immigrations.

Guan Zhong, Prime Minister of the Qi state 7th century BCE, imposed different taxation and conscription policies on different areas.[6] In addition, Guan Zhong also banned immigration, emigration, and separation of families without permission.

Further .. Xiao He, the first Chancellor of the Han Dynasty, added the chapter of Hu (Chinese: 户律, "Households Code") as one of the nine basic law codes of Han (Chinese: 九章律), and established the Hukou system as the basis of tax revenue and conscription.

As for the market. My personal opinion is that a temporary government sponsored floor is now in place to halt a panic and likely the market will drift around this level for a few weeks to months and then I suspect it will drift lower as the lockup on trading specific shares expires (not all at once mind you) and the government will continue to prop up the market via a quantitative easing mechanism where the PBOC may be the buyer of last resort.

Consumer confidence is the real issue now in china with housing flat, markets down significantly, and GDP now liked below 6 percent. Inflation has been running less than 3 percent too... A real worry. Rest of the world needs to worry about consumption of china. Auto industry is going to be in trouble later this year if china doesn't boost consumer confidence via tax incentives as they did in late 2007 post Olympics. Also I suspect those plans are already on the drawing board ...
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Old 07-14-2015, 08:36 AM   #65
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Wow! I knew that our mass transportation system trails that of other countries, but some of that is because Americans love their car too much to give it up. For long range travel, they like to fly more than taking the train, even if it is available.

But our highways and roads suck?
I have not been to the US Pacific coast yet, so I cannot comment on that. When we travelled across New England in 2009, we were very surprised about the poor condition of many roads and highways, even major ones. I was quite happy about the soft suspension of our rental Chevy, given the size and depth of some of those potholes.
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Old 07-14-2015, 11:01 AM   #66
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I have not been to the US Pacific coast yet, so I cannot comment on that. When we travelled across New England in 2009, we were very surprised about the poor condition of many roads and highways, even major ones. I was quite happy about the soft suspension of our rental Chevy, given the size and depth of some of those potholes.
Go drive in South America or Central America then you will come back to the USA and marvel at our roads.

The nice thing about parts of South America though is you don't have to remember which side of the road they drive on...they always drive on the better side.
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Old 07-14-2015, 11:17 AM   #67
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In the past 5 years, I have logged about 35,000 miles (56,000 km) of RV travel. Driving a motorhome with its tire pressure running 2x to 3x the pressure of passenger car tires, plus carrying pots, pans, and dishes that rattle makes me very sensitive to the road condition. A class A with fancy air suspension may be a lot better, but mine is just a low-end class C.

So, speaking from this experience, which may not mean much because the US has 4 million miles of road, I have seen that the road condition can vary quite a bit. Interstates and major highways are usually better maintained than rural roads with less traffic, as can be expected. Occasionally, we have seen heavily traveled interstates that were just terrible. The best roads tend to be the ones most recently built or resurfaced. I think new technologies allow the newer roads to be better, while the older ones will stay lousy until it's their turn to get updated.

And in rural areas where population density is low, of course the road is bad. There's just not enough money. The subdivision of my 2nd home in the high-country barely has a road running through it. It has not been maintained since the developer cut a path through the forest perhaps 40 years ago. The county only maintains the road up to my lot, and that is a gravel road. Further down the road from me, my neighbors fend for themselves (need 4-wheel-drive vehicles with high clearance even when it's dry). This means they often get locked in when it snows in the winter, as the county snowplow turns around right at my lot.

The above are stick-built homes with values of a few hundred K's, and taxed as highly as homes in the cities. There's no mail service (one goes to the post office), no garbage collection (drive your own garbage to the county dump), no city water (need private well), no city sewer (use septic tank). But people like to stay in the high-country boondock among the evergreen trees to enjoy cool clear air, and that's what they are willing to put up with to be where it is not crowded.

Oh, by the way, once you get out to the highway, it's silky smooth. I don't know how anyone can make a road better than that, except to pave it with marshmallow.
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Old 07-15-2015, 02:36 AM   #68
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Go drive in South America or Central America then you will come back to the USA and marvel at our roads.
I wasn't aware that 3rd world countries are the new benchmark for the US. You're kinda proving my point.

But remember:
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Old 07-15-2015, 06:12 AM   #69
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So the Shanghi market is down %3 eventhough Chinese GDP growth was 7% which was above expectations, I guess there markets make as much sense as ours do most of the time. .

I think that I'm puzzled about is what I look at a broad base international fund about 6% of the assets are in China for emerging market the number is 20-25%.

Yet what I hear is that foreign ownership is very restricted in the Shanghai exchange. But the Hong Kong market is more open. So do all these international funds invest via Hong Kong or some other way?
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Old 07-15-2015, 11:31 AM   #70
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China indeed has been on a road building binge. Their expressways linking major cities are fairly good, and that's what impresses visitors.

See this 2011 article: Road-Building Rage To Leave U.S. In Dust - China Real Time Report - WSJ

Note that many expressways are toll roads, as how they are financed.

Sometimes, they build so fast that they fail to coordinate between different projects.



But these are major highways. I have not found any number citing the total mileage of roads in the country to compare with 4 million miles in the US. Of course the US has had a lead of decades in building roads going to remote places, the like of those in China are not visited by visitors.

In a Wikipedia article (https://en.wikipedia.org/wiki/China_National_Highways), a photo of a rural highway was posted.



Then, as the US has more secondary paved roads, we have to remember the cost to maintain them. I have not found the total cost for road maintenance in the US vs. China for comparison.

As I described earlier, Chinese people like to live in cities in high-rises, in order to enjoy the modern amenities. So, it makes sense for them to speed up the expressway projects to link them.

The US has the interstate system, but then US people still like to be spread out, and still have the same luxuries. Maintaining roads over low-density areas costs a lot of money, yet people may not appreciate it.
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Old 07-16-2015, 08:24 AM   #71
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So the Shanghi market is down %3 eventhough Chinese GDP growth was 7% which was above expectations, I guess there markets make as much sense as ours do most of the time. .

I think that I'm puzzled about is what I look at a broad base international fund about 6% of the assets are in China for emerging market the number is 20-25%.

Yet what I hear is that foreign ownership is very restricted in the Shanghai exchange. But the Hong Kong market is more open. So do all these international funds invest via Hong Kong or some other way?
A recent article in Bloomberg said the median P/E of Chinese stock is 60. In 2007, it reached 68. If we discount the value of the stocks back to the norm even accounting for the 7% growth to allow the P/E to be higher, then China stock market is fairly small relative to its GDP. I read that many businesses and factories there are still operated by the government. Perhaps those are not captured in the total market capitalization.

About the 7% growth, another article said that China debt load grows even faster. I have trouble finding that article again to link here.

PS. OK, I found it here: China's Debt-to-GDP Ratio Just Climbed to a Record High - Bloomberg Business.

Excerpt:
While China's economic expansion beat analysts' forecasts in the second quarter, the country's debt levels increased at an even faster pace.

Outstanding loans for companies and households stood at a record 207 percent of gross domestic product at the end of June, up from 125 percent in 2008, data compiled by Bloomberg show.
Note that these are private and not public debts. I wonder what the equivalent number is for other countries. The growth rate of the debt is quite high, considering that GDP also grows.
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Old 07-16-2015, 03:29 PM   #72
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China announced that it once again hit its gross-domestic-product growth target of 7%.
This reminds me of Bernard Madoff and his steady returns for 30 years.
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Old 07-16-2015, 03:46 PM   #73
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China announced that it once again hit its gross-domestic-product growth target of 7%.
This reminds me of Bernard Madoff and his steady returns for 30 years.
Ha. I would not trust the communist for anything. But that's me.
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Old 07-16-2015, 04:13 PM   #74
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Ha. I would not trust the communist for anything. But that's me.

I bet they gave serious consideration to saying 6%, but the 7% ers outvoted them in the "smoked filled room".


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Old 07-20-2015, 01:30 PM   #75
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A NYT link to a 5 minute video of the build out of China's largest city.
Very worthwhile, especially for anyone who has a problem visualizing a city of 130 million people.

The title of the article is:

in-china-a-supercity-rises-around-beijing


Hopefully that headline should get you around the paywall.
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Old 07-20-2015, 02:47 PM   #76
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Headline worked for me, thanks.

Chinese and scale, amazing. Quantity does have a quality of its own.
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Old 07-20-2015, 04:14 PM   #77
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I read the same article earlier today when it was published on MSN, and just now see the video on NYT web site. The article has a lot more details on the living conditions in the surrounding bedroom communities of Beijing.

I was most impressed by the elderly who woke up early to stand in the bus waiting line for as long as 1 hour to hold the place for their children who commuted to work. This was so that their offspring could have another hour of sleep. The bus took as long as 2 hours to go the 20-mile one-way distance as talked about in the video (the article text says 3 hours to go 25 miles).

The article talks about a planned megacity the size of the state of Kansas, which will house 130 million residents. That's 1/3 the population of the US. The thought of such megalopolis is mind-boggling. Of course with such dense population they will need wide roads, and huge public transportation facilities.

I prefer the way of life here in the US with our 4 million miles of road (some with potholes) where we are more spread out, thank you.

Here's another link to the same article: http://www.nytimes.com/2015/07/20/wo...d-beijing.html.
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Old 07-21-2015, 03:29 PM   #78
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The article talks about a planned megacity the size of the state of Kansas, which will house 130 million residents. That's 1/3 the population of the US. The thought of such megalopolis is mind-boggling. Of course with such dense population they will need wide roads, and huge public transportation facilities.

I prefer the way of life here in the US with our 4 million miles of road (some with potholes) where we are more spread out, thank you.
Yes, indeed! The few times I've been to NYC that was horrible (for me) and I cannot imagine having to live in a city many times larger. But I guess "ya do what ya gotta do" if one's options are limited.
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Old 07-21-2015, 04:27 PM   #79
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More proof that the Chinese market is very different.

From the WSJ

Quote:
HONG KONG—China may have the world’s second-biggest stock market after the U.S., but at one point during a roller-coaster ride for investors this month only 93 of 2,879 listed companies were freely tradable—about the same number as trade in Oman.
On July 9, a day after the market hit bottom, just 3.2% of Chinese-listed companies could be traded normally, according to an analysis by The Wall Street Journal using FactSet data. The rest of the shares on the Shenzhen and Shanghai stock exchanges either were suspended or hit their daily limit. China’s market rules prevent share prices from moving freely once they rise or fall by 10%
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Old 07-22-2015, 02:11 PM   #80
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The article talks about a planned megacity the size of the state of Kansas, which will house 130 million residents. That's 1/3 the population of the US. The thought of such megalopolis is mind-boggling. Of course with such dense population they will need wide roads, and huge public transportation facilities.
I was talking to my brother about this and we put it into a European context, thought I'd share it here.

It's about the same population density as the combined Paris region, London region, Randstad (Amsterdam/Utrecht/Rotterdam triangle) and northern part of Belgium. Those areas together have 35 million people. You only have to re-imagine the north sea as a really big river

So if you'd take that combined region and copy it four times .. viola.

Another one: Beijing and Tianjin are each on their own already #3 and #4 cities in population in the world.

So sure, why not merge ...
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