저자: EdYardeni · 외국인
요약 보기
중국 경제는 부동산 붕괴·고령화·소비 위축으로 약하며, 채권시장(10년물 1.6%)이 이를 반영한다. 정부 부양책은 신뢰가 낮고 시장이 관망 중이다. 중국 주식은 2024년 반등했으나 부동산주는 되밀리는 중. 장기적으로는 기업가 자본주의 복원이 필요하며, 밸류에이션은 싸지만 투자 매력은 제한적이라는 입장.
다듬은 글
As U.S. President elect Donald Trump prepares his second administration. American companies will be keeping a close eye on US-China ties. Add your Danny prisoner, your Danny reset is still with us. And he thinks the promise of China's market has faded as its once booming economy hits trouble. And add you're saying China remains on investable.
Yeah, I think that's really the message from the bond market. I mean, the bond yields down to 1.6%. I think that's a clear indication that the Chinese government has overstimulated the economy. Too much debt, too much excess capacity. And then on top of all that, the rules change on a regular basis over there.
I think China did extremely well when the government allowed market forces to work and for entrepreneurial incentives to work to create more prosperity. But somewhere along the way, the decision was made that maybe that's not the way to go anymore. And it's not a good environment for a lot of businesses.
And this is not just my opinion. I think The Wall Street Journal just ran an article saying that a lot of companies, U.S. and other companies are deciding that the China market just doesn't have the potential that they thought they would have. And there's too much government intervention in trying to run run ones business over there.
You talked about how the bond market is suggesting all of that, some now suggesting as well that bond yields could has one before the end of the year, might even get closer to zero? Yeah, I think it could get closer to zero. I think it's got to be disturbing to the government to basically announce that they've got another fiscal stimulus package and to see the bond yield continue to go up.
It's certainly not a vote of confidence by the fixed income markets that this package is going to do much. In addition, I'm watching some of their property stock prices in in China, and they rallied for a little while late last year and now they're starting to fade away. There's a story floating about, I think it again was a Wall Street Journal article saying that something like $18 trillion of losses have been incurred by Chinese investors in the real estate market, much bigger than the losses we incurred during the great financial crisis in the United States.
So I think China is kind of experiencing what Japan experienced, what the United States experienced, but maybe on a bigger scale and a property debacle takes many years to kind of clean out and to overcome. Meanwhile, it continues to weigh on the Chinese economy. What do you make of the contrast between China's bond and equity market?
And I mean, we take a look at the MSCI Asia, or rather the MSCI China Index and the CSI 300 index say, well, they had the best year in four years in 2024. That's after several really bad years. And if you look at the chart, that's not a chart that suggests that being a long term investor has been very profitable.
There have been lots of ups and downs, and you have to be almost a trader to to get any sort of positive return on it. So, yeah, you're absolutely right. It's it's had a good it had a good 2024, especially later in the year as the government came in with some monetary and credit stimulus programs. But now it seems like they're running out of magic here, that if the fiscal stimulus can't do the trick, then what's what's really left?
And they really need to stimulate their consumer spending. They know that. But it's not working because, again, the the Chinese and individuals households have a tremendous amount of money saved in their apartments and the apartment values have gone down. The market is illiquid. It's hard to sell it.
And if you sell it, you take a big capital loss. And meanwhile, consumer confidence is extremely depressed in China. So it all goes really back to the consumer. And if you can't get the consumer going, then they have to continue to rely on exports. And now they're getting the blowback, the backlash from the rest of the world and the rest of the world is saying no more and no, no more dumping of Chinese goods in global markets, you know, competing with our business.
I mean, it's it's been a disaster for Germany. German the German auto industry has been decimated by competition from from China. There's been a lot of disappointment in China in terms of stimulus. And we know that the market was expecting a triple R cut at the end of 2024. That didn't happen. Now, they say perhaps at the end of this month, I mean, how significant is that in terms of how it might play out in the market?
Might that be a game changer or not? Well, I think, you know, if. If. They took my advice, I would tell them that the government should kind of copy what the U.S. did during the pandemic. And that's true. Helicopter money just send stimulus checks to households. I think the reason they don't want to do that is it could be very embarrassing if Chinese households don't spend that money and and goods and services, but instead save it to kind of make up for the losses that they've taken in the in the real estate market.
But they're running out of out of options here. Monetary policy has eased, the bond markets eased even more. And yet we just saw that the purchasing managers index for manufacturing was relatively weak in December. The good news is the services was somewhat elevated, but it's a very volatile index. And all in all that, all the data adds up to a relatively weak Chinese economy with a significant recession in the property market.
But the messaging out of China has been of confidence. Just earlier today, we had an official saying that they will continue to build on growth in 2025. I'm just wondering whether it's just a matter of time, just a matter of waiting for Trump's policies to get that clarity before perhaps we see QE or other stimulus that that may come its way?
Yeah, I think the markets are taking a wait and see attitude. Maybe in the past when the government had more credibility in its ability to stimulate the economy with fiscal monetary policies, the markets would have reacted right away to the fiscal program that they're they've just recently announced.
But the markets say, well, it's going to take a while before this actually gets implemented and it's going to take a while to see to assess whether it's actually working. So I think that's the problem they're having with convincing the markets. And so, so far, the evidence for the markets is, you know, there's not a lot of confidence that any of this is going to work.
When you take a look at Chinese assets, you take a look at the bonds, you take a look at the yuan and you know the stock market. Are they rightly reflecting the position of the economy right now, the weakness of the economy right now? Are being realistic about what's going on there. We did see a rally and as I said at the end of last year, they did implement some monetary and credit stimulus in monetary and credit stimulus.
Easy money, liquidity typically tends to be bullish for stocks. But again, one of the key sectors is the property market, the stocks, the stocks of the property developers. And they rallied, but now they're fading away. So that's just a sign of kind of the deep underlying problem. Look, the reality is that they've got a significant demographic issue with their rapidly aging population, and so they can build all the infrastructure they want.
But old people don't go anywhere. They don't travel as much. They can't afford to spend a lot of money on airfare and on, you know, super fast railroads. So the infrastructure spending, they've got beautiful state of the art infrastructure. I wish we had that the United States. But they they have more than the country can really use in terms of the population and their demands for those kind of infrastructures.
The thing is ADD this remains the second largest economy in the world. Can you afford not to be in the second largest economy in the world? And could China perhaps be a diversifier? Could could it be a market that you diversify in for your portfolio? Well, some would say that. And again, from a valuation standpoint, it certainly, even with a rally, is relatively cheap.
But I'd like to see more freedom for entrepreneurial capitalism. It worked really well for about 20, 30 years. And I think that was really what drove the prosperity of China. And to to step on the brakes and that kind of system that worked so well is unfortunate because I think China is a great country, a great people, hard working people with great intelligence.
The technological innovations are great. I just wish that the the hostile relations between China and the Western world, particularly between the United States, but also Canada, Australia, I think I think it would be in everybody's best interests if we figured out how to calm everybody down. And instead of preparing for wars with each other, we we learn how to work with each other.
But, you know, that's a very John Lennon kind of notion. I guess we can you and I can sing the song and it wouldn't make much difference at this point.
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