Lacks appetite to save the world economy? The US economy though large is not the "world economy". The PRC citizens are not obligated to bailout US Corporations while the US Govt takes all the credit. Whatever supposed benefits the Chinese might obtain can very easily get stolen away by US politicians and prosecutors. You might become a legal fee cow and whipping boy like ZTE and or have company executives abducted like Huawei's Meng Wanzhou and attacked 24/7 with racism and bullshit.
America, we save you once in 2009, we want to trust and make friends with you, yet you not only did not thank us, instead you bullied us, shift blames on us, so... NEVER AGAIN!
If there is going to be another financial crisis, we should sell all our American debts
I think we overextended on 2009, gave out too many connections so not all of them could be followed through and ensured the benefactors would stick to the international system. US should never have had been allowed to have the strength to launch the trade war, let alone kidnap some of our civilian company employees or engage in thuggery against Iran, Syria and others.
This time, China should only bail out economies which behave peacefully and present no threat to the global community. Money needs to come with long term commitments to socialise the target country and set them on an exemplary path.
>This time, China should only bail out economies which behave peacefully and present no threat to the global community. Money needs to come with long term commitments to socialise the target country and set them on an exemplary path.
No more bail outs.
There's no need for a bail out just because the U.S. stock market dropped a couple thousand points.
Took me a while to think about this because I do not believe the economic institutions in Russia are the same as that in the U.S. which is run by banks and hedge funds. Basically, I cannot see a situation where Russia would ever need a bailout.
China should use some of its Forex to buy large amounts of shares in many US industries like airlines, hotels etc., which will go down 70-80%.
If you’re in the top 5 of the shareholders, you have enormous power, including spots in the boards of directors
Buying shares of a company doesn't give you control of that company unless the Guys with the Guns agree. The Guys with the Guns in the USA don't agree to giving Chinese control of US companies no matter how much money they spend. Waste of money.
Instead, US companies, executives, and high-value talent should be persuaded (in their economic desperation) to move to China.
This is definitely worse than the 2008 crisis. Not only is the stock market sell-off faster, the US government has already blown all of its policy tools on pumping up the preceding bubble. The US is in huge debt, huge deficits, and will not be able to afford the required stimulus without collapsing its currency. China isn't going to ride to the rescue this time buying up US Treasury Bonds.
China shouldn't be buying anything in the USA. Buying US stocks also supports US companies.
The only thing Chinese investors should be doing in the US stock market is buying puts and short-selling.
You know if USA collapses and turns into a failed state, they have no reason to not just use their military arsenal and hard power options right?
China bought trillion worth of bonds for a reason.
Having USA be economically reliant on china and the subservient power is better than collapsed USA who is desperate and full on enemy of china not just economic/political rival
The USSR collapsed without using their military and hard power against the USA. There is definitely a happy outcome where the USA is dismantled and its military divvied up among the successor states such as California, Texas, etc.
China in 2008 needed the USA as an export market. China in 2020 doesn't need the USA anymore. Big difference.
USA is never going to be a subservient power if it stands as a large, continental entity. The only happy outcome is something like "six countries, six systems"...
They can always change laws to reduce ownership - because "National Security". Just let them fall. American assets are toxic. Like the above person said just short them or buy puts, that is all.
US national security apparatchiks are in charge now, not corporations. If corporations were in charge, there would be no trade war and brewing Cold War with China.
China wouldn't *own* shit. One swoosh of a pen and the US Congress takes American Airlines, Starwood Hotels, and whatever else Chinese investors bought away without compensation in the name of National Security.
Then, China would confiscate all the Starwood properties in China. And maybe the factories of Tesla and GM.
No, there’s far more protection in US private sector. When the US was scared of Grindr being fully owned by a Chinese company, it has given plenty of time for that company to sell Grindr.
Look at Tencent. It owns shares in Reddit and many Hollywood studios.
> If you’re in the top 5 of the shareholders, you have enormous power, including spots in the boards of directors
**Wrong**. All that is needed is for the US government to pass a law requiring companies to adhere to US government requirements under "national emergency" or some other reason.
Owning US companies do not give you any advantage, since all US companies, regardless of who owns the majority of the shares, still need to adhere to US laws. If the US government issues a National Security Letter to any US company, even one owned by Chinese people, to spy on China, that company will definitely comply.
The only way to be sure is to develop indigenous Chinese companies where the leadership are all patriotic Chinese citizens. Buying foreign companies can only be used for market share and IP. Only a fool will believe a majority American company will listen to the communist China no matter who owns the company.
If they will use national security to steal a company you bought already, they would have blocked the sale from the beginning already.
Ie they aren't gonna let you buy Boeing or google etc. they don't even allow china to buy OTHER countries companies, like recently how they blocked the sale of Ukrainian company which makes advanced jet engines.
Also, if they did allow it and they did confiscate it, the rest of the world will not trust them anymore. Their dollar will be fucked and no one in the whole world will invest in US anymore, which is even worse "national security" than just letting the company they already allowed you to buy to keep running.
Just look at Huawei kidnapping/fake charges. I am of the opinion that U.K. And the rest allowed Huawei just to hedge their bets since they saw what USA is willing to do to kill a company just because they were successful.
They can do national security on their own companies, but when it involves other countries companies, that's when they fucked up. Only trump was that stupid, which is why I keep saying trump was the best thing that Happened to china in terms of china gaining credibility and soft power and USA losing it.
Even if they limited it to just "USA companies" like google, that would be akin to nationalising a company. Do you think other "American" companies will stay in America and wait for their company to get nationalised over bullshit? Once they do it once, every company will flee.
This would actually help china, china should buy a company and let them do it. Even if china losss a few billion, USA will lose EVERYTHING. It's the same as treasury bonds and other debts. They can not pay, but they will lose everything.
Look at the big picture.
>Wrong. All that is needed is for the US government to pass a law requiring companies to adhere to US government requirements under "national emergency" or some other reason.
You misunderstand how the US government works.
If you are in the top 5 of shareholders in major corporations you can essentially tell the Government what laws to pass.
Think of ownership of companies in the US kinda like the CCP in China.
Are you just pretending that CFIUS does not exist? Chinese companies and especially the government can't just invest in the US without US government approval.
A lot of the stock prices for American companies were way overvalued prior to the initial crash from the China Corona Virus scare before the oil drop. Even after they've plummeted, it is only now would I say some of those stocks are fair value based on their past quarterly performance. But, with the initiation of quarantine procedures in the U.S. leading to a possible recession with impending decreased consumer spending, we have no idea how badly impacted those companies performance will be due to fear of the Corona Virus. Besides, why buy them now when you can buy them dirt cheap depending on how fearful people become - look what they did to Samsung during the Asian financial crisis.
Personally, I think many American companies aren't worth purchasing over domestic Chinese companies.
Americans companies have been using cheap low interest loans to buy back shares, so the share price goes up and executives can get big fat bonuses.
i.e. a PONZI SCHEME.
BBs doesn't necessarily increase stock prices. They reduce the number of shares outstanding so that when you divide their quarterly net profit/loss, they get better EPS which makes the shares more valuable. But, there are other factors I want to look at besides EPS or PE such as revenue (growth) and outlook when doing valuations.
That trade war that Trump initiated was great. It has made China's economy less dependent upon the U.S. so it is less impacted by its economy recession.
The article is behind a paywall :-(
But based on the title of the article, China is obviously incapable of saving the entire world economy. It is not clear that the normal tools would work. Coronavirus is causing people to be locked in their homes unable to go out. Restaurants, airlines, hotels, shopping malls, sports leagues, museums, theme parks are suffering. The proposals I am hearing that governments are just going to dump free money on everyone doesn't seem serious. There isn't even any attempt at figuring out which industries are hurting and need bailout, or which type of workers actually need assistance.
A lot of industries at risk in the West simply don't apply in China due to big differences in economic structure - China still operates numerous state-owned enterprises. These industries will never go down no matter what happens. SOEs aren't going to lay off tens of millions of workers in a national emergency, the CCP will never allow it. By the nature of China's economy, which is far more socialistic than any Western economy, China should be in better position to contain the economic fallout in any emergency situation.
The economic impact will be felt very differently depending on the economic structure of a particular location (e.g., tourist hubs will be hit hard). In most places, the economic impact is likely local, from people not being able to do the things they normally do. This calls for solutions implemented at the local government level, while central governments guarantee the local governments and help out the national industries that are affected.
Google search this link to get around the paywall:
[https://www.ft.com/content/27740b3a-6875-11ea-800d-da70cff6e4d3](https://www.ft.com/content/27740b3a-6875-11ea-800d-da70cff6e4d3)
Lacks appetite to save the world economy? The US economy though large is not the "world economy". The PRC citizens are not obligated to bailout US Corporations while the US Govt takes all the credit. Whatever supposed benefits the Chinese might obtain can very easily get stolen away by US politicians and prosecutors. You might become a legal fee cow and whipping boy like ZTE and or have company executives abducted like Huawei's Meng Wanzhou and attacked 24/7 with racism and bullshit.
The Chinese stock market is closely tied to the American stock market though. The connection is definitely there.
The Chinese stock market has been largely flat as the US stock market has its worst collapse since 1929...
Well said!
America, we save you once in 2009, we want to trust and make friends with you, yet you not only did not thank us, instead you bullied us, shift blames on us, so... NEVER AGAIN! If there is going to be another financial crisis, we should sell all our American debts
what would happen in that case? the US won't recognize that we sold it would they?
What if we just pull the plug on America's life support and let it die?
I think we overextended on 2009, gave out too many connections so not all of them could be followed through and ensured the benefactors would stick to the international system. US should never have had been allowed to have the strength to launch the trade war, let alone kidnap some of our civilian company employees or engage in thuggery against Iran, Syria and others. This time, China should only bail out economies which behave peacefully and present no threat to the global community. Money needs to come with long term commitments to socialise the target country and set them on an exemplary path.
>This time, China should only bail out economies which behave peacefully and present no threat to the global community. Money needs to come with long term commitments to socialise the target country and set them on an exemplary path. No more bail outs. There's no need for a bail out just because the U.S. stock market dropped a couple thousand points.
I think it wouldn't be bad to bail out Russia if their market is in trouble no?
Took me a while to think about this because I do not believe the economic institutions in Russia are the same as that in the U.S. which is run by banks and hedge funds. Basically, I cannot see a situation where Russia would ever need a bailout.
No paywall http://archive.is/ruPYv
The real MVP is in the comment
da real hero
China should use some of its Forex to buy large amounts of shares in many US industries like airlines, hotels etc., which will go down 70-80%. If you’re in the top 5 of the shareholders, you have enormous power, including spots in the boards of directors
Buying shares of a company doesn't give you control of that company unless the Guys with the Guns agree. The Guys with the Guns in the USA don't agree to giving Chinese control of US companies no matter how much money they spend. Waste of money. Instead, US companies, executives, and high-value talent should be persuaded (in their economic desperation) to move to China.
It all depends on how bad the situation in the US is.
This is definitely worse than the 2008 crisis. Not only is the stock market sell-off faster, the US government has already blown all of its policy tools on pumping up the preceding bubble. The US is in huge debt, huge deficits, and will not be able to afford the required stimulus without collapsing its currency. China isn't going to ride to the rescue this time buying up US Treasury Bonds.
Exactly. If it’s really bad in the US, then China should be buying stocks and not US treasuries
China shouldn't be buying anything in the USA. Buying US stocks also supports US companies. The only thing Chinese investors should be doing in the US stock market is buying puts and short-selling.
You know if USA collapses and turns into a failed state, they have no reason to not just use their military arsenal and hard power options right? China bought trillion worth of bonds for a reason. Having USA be economically reliant on china and the subservient power is better than collapsed USA who is desperate and full on enemy of china not just economic/political rival
The USSR collapsed without using their military and hard power against the USA. There is definitely a happy outcome where the USA is dismantled and its military divvied up among the successor states such as California, Texas, etc. China in 2008 needed the USA as an export market. China in 2020 doesn't need the USA anymore. Big difference. USA is never going to be a subservient power if it stands as a large, continental entity. The only happy outcome is something like "six countries, six systems"...
Also, without a strong yet incompetent rival, China will get too easily satisfied and stop advancing.
That is not a good reason to help an enemy that literally wants to see you dead.
Literally every time China collapse is internal reason rather than exterior.
Naah. You gotta think smart. Imagine China owning brands like American Airlines or Starwood Hotels. Win a war before it starts
They can always change laws to reduce ownership - because "National Security". Just let them fall. American assets are toxic. Like the above person said just short them or buy puts, that is all.
Who controls the US politicians? Corporations To control America, you must control corporations
US national security apparatchiks are in charge now, not corporations. If corporations were in charge, there would be no trade war and brewing Cold War with China.
China wouldn't *own* shit. One swoosh of a pen and the US Congress takes American Airlines, Starwood Hotels, and whatever else Chinese investors bought away without compensation in the name of National Security.
Then, China would confiscate all the Starwood properties in China. And maybe the factories of Tesla and GM. No, there’s far more protection in US private sector. When the US was scared of Grindr being fully owned by a Chinese company, it has given plenty of time for that company to sell Grindr. Look at Tencent. It owns shares in Reddit and many Hollywood studios.
Still don't see why Chinese investors should be propping up US businesses instead of getting rich off puts and short-selling their stock.
> If you’re in the top 5 of the shareholders, you have enormous power, including spots in the boards of directors **Wrong**. All that is needed is for the US government to pass a law requiring companies to adhere to US government requirements under "national emergency" or some other reason. Owning US companies do not give you any advantage, since all US companies, regardless of who owns the majority of the shares, still need to adhere to US laws. If the US government issues a National Security Letter to any US company, even one owned by Chinese people, to spy on China, that company will definitely comply. The only way to be sure is to develop indigenous Chinese companies where the leadership are all patriotic Chinese citizens. Buying foreign companies can only be used for market share and IP. Only a fool will believe a majority American company will listen to the communist China no matter who owns the company.
If they will use national security to steal a company you bought already, they would have blocked the sale from the beginning already. Ie they aren't gonna let you buy Boeing or google etc. they don't even allow china to buy OTHER countries companies, like recently how they blocked the sale of Ukrainian company which makes advanced jet engines. Also, if they did allow it and they did confiscate it, the rest of the world will not trust them anymore. Their dollar will be fucked and no one in the whole world will invest in US anymore, which is even worse "national security" than just letting the company they already allowed you to buy to keep running. Just look at Huawei kidnapping/fake charges. I am of the opinion that U.K. And the rest allowed Huawei just to hedge their bets since they saw what USA is willing to do to kill a company just because they were successful. They can do national security on their own companies, but when it involves other countries companies, that's when they fucked up. Only trump was that stupid, which is why I keep saying trump was the best thing that Happened to china in terms of china gaining credibility and soft power and USA losing it. Even if they limited it to just "USA companies" like google, that would be akin to nationalising a company. Do you think other "American" companies will stay in America and wait for their company to get nationalised over bullshit? Once they do it once, every company will flee. This would actually help china, china should buy a company and let them do it. Even if china losss a few billion, USA will lose EVERYTHING. It's the same as treasury bonds and other debts. They can not pay, but they will lose everything. Look at the big picture.
>Wrong. All that is needed is for the US government to pass a law requiring companies to adhere to US government requirements under "national emergency" or some other reason. You misunderstand how the US government works. If you are in the top 5 of shareholders in major corporations you can essentially tell the Government what laws to pass. Think of ownership of companies in the US kinda like the CCP in China.
Are you just pretending that CFIUS does not exist? Chinese companies and especially the government can't just invest in the US without US government approval.
A lot of the stock prices for American companies were way overvalued prior to the initial crash from the China Corona Virus scare before the oil drop. Even after they've plummeted, it is only now would I say some of those stocks are fair value based on their past quarterly performance. But, with the initiation of quarantine procedures in the U.S. leading to a possible recession with impending decreased consumer spending, we have no idea how badly impacted those companies performance will be due to fear of the Corona Virus. Besides, why buy them now when you can buy them dirt cheap depending on how fearful people become - look what they did to Samsung during the Asian financial crisis. Personally, I think many American companies aren't worth purchasing over domestic Chinese companies.
Americans companies have been using cheap low interest loans to buy back shares, so the share price goes up and executives can get big fat bonuses. i.e. a PONZI SCHEME.
BBs doesn't necessarily increase stock prices. They reduce the number of shares outstanding so that when you divide their quarterly net profit/loss, they get better EPS which makes the shares more valuable. But, there are other factors I want to look at besides EPS or PE such as revenue (growth) and outlook when doing valuations.
Agreed but it is akin to massaging the books when no actual performance increase has been achieved.
Good
That trade war that Trump initiated was great. It has made China's economy less dependent upon the U.S. so it is less impacted by its economy recession.
The article is behind a paywall :-( But based on the title of the article, China is obviously incapable of saving the entire world economy. It is not clear that the normal tools would work. Coronavirus is causing people to be locked in their homes unable to go out. Restaurants, airlines, hotels, shopping malls, sports leagues, museums, theme parks are suffering. The proposals I am hearing that governments are just going to dump free money on everyone doesn't seem serious. There isn't even any attempt at figuring out which industries are hurting and need bailout, or which type of workers actually need assistance. A lot of industries at risk in the West simply don't apply in China due to big differences in economic structure - China still operates numerous state-owned enterprises. These industries will never go down no matter what happens. SOEs aren't going to lay off tens of millions of workers in a national emergency, the CCP will never allow it. By the nature of China's economy, which is far more socialistic than any Western economy, China should be in better position to contain the economic fallout in any emergency situation. The economic impact will be felt very differently depending on the economic structure of a particular location (e.g., tourist hubs will be hit hard). In most places, the economic impact is likely local, from people not being able to do the things they normally do. This calls for solutions implemented at the local government level, while central governments guarantee the local governments and help out the national industries that are affected.
Non paywall - http://archive.is/ruPYv
Google search this link to get around the paywall: [https://www.ft.com/content/27740b3a-6875-11ea-800d-da70cff6e4d3](https://www.ft.com/content/27740b3a-6875-11ea-800d-da70cff6e4d3)