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The real question about China for investors

Author and director of China market research at Rhodium Group

Annexation of China by its intellectual property and giants has stifled economic markets, sparking controversy over whether China is still “possible” or not.

Height savers says that Beijing’s contribution to economic growth and market liberation will not change. He cares recent actions as strict rules on repayment of property loans and efforts to reduce conflict within the organization. Significant changes in interest rates will help to improve the performance of Chinese financial markets over time.

Against, savers says that under Xi Jinping China’s political goals have changed and sustained the growth and liberalization of corporate markets now that is less important for national leadership than goals related to “Common Pleasure”. They say summer campaigns, inclusive attack in the technical industry as well teaching and learning business, meaning China is becoming less secure for investors.

While this discussion may be interesting, it is wrong. The most important question facing the markets today is related to Beijing’s manufacturing processes, not political goals – not final ones.

Combating infectious diseases from natural disasters a Evergrande and some manufacturers that are expanding during the recession need to respond appropriately. But this has not happened yet and the reasons why Beijing did not do so are unknown. Are Chinese experts holding back because the current market turmoil is part of an effort to reduce risk? Or has new politics prevented Chinese experts from acting?

Although the increase in debt has not occurred for more than a decade, China has not experienced a slowdown in economic growth or a slowdown in growth (except for the epidemic last year).

Stability cannot be easily explained by economic factors such as the amount of money in China or its debt status, or by politics such as the tools of government or the lack of legislation in Beijing.

Instead, Beijing’s political ambitions have come to an end long history Officials are expected to respond to minor financial problems to stabilize markets.

But the reliability of this expectation depends on the decision-making process that also applies in the past. Sometimes, waiting too long to respond to the current crisis in the commodity market will lead to more diseases and a number of factors will weaken China’s economy and economic system. These include the risk of property collapse in the use of housing, the risk of land leakage to the financial sector in the local government and the use of land as collateral for mortgages.

Beijing’s remote targets will not have a problem if the latest weapons of economic change become obsolete. Many economists say Beijing will be forced to step back from overseeing the financial sector, due to the importance of economic activity.

But political analysts say there is ample evidence that leadership reform efforts are hampering the critical responses that markets have become accustomed to seeing.

As soon as economic political tools are integrated with political importance, technocrats face new challenges of changing strategies or changing communications from leadership. Similarly, the researchers say the establishment of jurisdiction has reduced some of the experimental powers within the parties that could correct misconduct among them. As a result, while the outcome of these discussions is still unknown, the destruction of many points has become a major threat.

In 2013, China’s largest bank tried to reduce sentiment in the interbank market as soon as there was an emergency payment. Banks were about to close in response, short prices reached 20 to 30%. The central bank was forced to stop and inject fluids, which helped to expedite the expansion of shadow banking systems.

Beijing’s intentions were clear, but the tactics he used caused it to contradict what was wanted. Given China’s development in the real estate industry, similar politics are hard to imagine. But Beijing’s response to the current market is even more important than its original leadership goals and will see how China looks.


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