저자: Kevin · 외국인
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중국 경제가 디플레이션·부동산 이중 하락·그림자금융 부실로 심각한 위기에 처해 있으며, 이것이 세계 경기침체로 번질 수 있다고 주장. 소비자물가 -0.3%, 생산 -4.4%, 수출 -14.5%, 총부채 GDP 대비 281%, 헝다·컨트리가든 부실, 가계 저축률 급등 등을 근거로 제시. 결과적으로 미국 금리 인하가 앞당겨질 수 있고, 중국 투자는 바닥을 알 수 없어 신중해야 한다는 결론.
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China's economy losing further momentum okay they are out and oh wow oh not good all right China's slowing down of course affectation affects the world our country's going to hell this is supposed to be the year that China's economy came roaring back what we've had instead are signs that this economy is struggling holy smokes a China's deflationary crash could spell not just recession and depression for China but also potentially recession for the world in America Janet Yellen our treasury secretary is calling this a big risk Donald Trump is worried about the United States dollar collapsing and presidential candidates like Vivek ramswami suggests that China is being pushed closer to nuclear war with America we have a lot to cover and in this video I'm going to talk about what's most at risk where the opportunity it could be and what to think about everything that's going o first what's going on well let's catch you up on that because there is a lot going on to get started consumer prices are down 30 basis points that is not that big of a number right but what matters is the sign it's a negative it is the first negative read in two and a half years 28 months to be specific and that's a big deal for China food deflation especially pushed us towards deflation in the last inflation report from China which you should absolutely be taking with a grain of salt because the numbers are probably worse than they actually appear in the Chinese documents but what's notable is that pork purchases and pork prices were down 26 percent that might not seem like a big deal to those of us in America but in China it's worth noting that China's often the world's top pork producer and pork is a big deal in the Chinese diet so to see pork prices down 26 percent implies something that might be more than just temporary inflation of course Chinese data suggests that hey well core and services are still moving fine at point eight percent so maybe it's too early to tell that China has with certainty fallen into deflation in fact it's leading some Publications to go as far as calling the deflation that's happening in China transitory now I did contort the headline a bit it's actually a financial times headline that suggests that Chinese deflation is likely to prove temporary but let's just say I have a suspicion it's going to end up being a lot larger and a lot longer lasting than anybody is expecting mostly because of the real systemic issues in China's economy many of those which we're going to talk about right now but before we hit some of the banking crises and real estate crises that are now flaring up even worse it's worth looking Beyond just the inflationary numbers and understanding that production is at a negative 4.4 percent read exports are down 14.5 percent Imports are down 12.7 retail sales in China are also much weaker than expected at two and a half percent versus the larger numbers we've had in previous months and the four percent we were expecting on top of this you've got a massive debt problem when you combine household corporate and government debt you're sitting at total debt in China at 281 percent of their gross domestic product this is not to be confused with just dividing government debt by GDP that is of course a smaller number this is adding everything together and the reason we're doing that is because it's everything corporations households local governments the big government the CCP all of them have too much debt unfortunately when you have more debt you end up being able to invest substantially less money when you'd actually like to the most you'd like to invest when prices are low but if you have too much debt your payments are too high the local governments can't invest in local infrastructure and you actually end up exacerbating the problem rather than taking advantage of lower prices that's the problem with bubbles everybody invests the money they have as things are going up up in a way as in a bubble and then as soon as prices come down they don't have money to actually invest when prices are low before we keep going let's get the sponsor for the video out of the way it's me I have a bunch of different things that I think are amazing and you're going to love courses on building your wealth with an expiring coupon code tonight we've got Financial advice as well that's where we do a portfolio review and analyze a wealth plan for you or some of the fundamentals that you're investing in we can analyze all of that for you check that out at stockhack.com or go to meet kevin.com for those courses on building your wealth where you learn all the principles of going from zero to millionaire to making money in the stock market making more money at your job as an employee or as an entrepreneur all of the tips and tricks that I've learned in these courses outlined easily for you to build your wealth take a look at all of these linked down below if you have questions email us at staff meet kevin.com thanks so much so those are some of the underlying problems in China but now we're starting to get 2021 problems back yet again leading some like JP Morgan to write the following Chinese housing set for double dip crash our property analysts are revising down their full year forecasts wait a minute what happened here so what's worth noting is that Chinese property values plummeted in 2022 as much as 40 percent especially as many of the ghost cities in China ended up vacant and the companies ended up bankrupt as many as 40 percent of Chinese housing developers have ended up missing payments or going bankrupt that is a massive number of companies but things seem better in 2023 since in 22 23 where we're comparing to that hole in 2022 that is prices fell down in 22 and then kind of started rebounding in 2023 and so you look back you're like oh look prices are up 10 year-over-year that's great after being down 30 to 40 percent okay fine some recovery but wait a minute now things are trending down again and one of the reasons things are trending down is because the Chinese consumer has given up we had a surge of spending in January of 23 as coveted lockdowns were finally released or ended we finally had our Chinese New Year celebrations and there was hope that China would become so productive this year that to some extent Not only would it rise Global GDP but if anything it would actually potentially risk the chance of inflation Rising globally which is of course not something we would hope but we would be able to grow and have growth to prevent a recession which is ultimately what everyone one in the world wants to avoid a recession that leads to layoffs joblessness and more bankruptcies because recessions are painful don't get me wrong prices going up are painful as well some inflation is preferred though over a recession that is why we have an inflation Target at two percent and not zero because we'd rather have a little bit of inflation than have a recession now of course we definitely need to have less inflation than what we've had especially since inflation is cumulative after all prices have gone up substantially but what's now happening in China well remember this China's real estate economy is about 30 percent the size of China's entire economy that's about one-third so one-third of every dollar in China's economy real estate in the United States it's about half that only about one in six dollars and unfortunately we're looking at defaults consider what's happening with Country Garden Country Garden survived the first wave of crisis in 2021 but now it's missed coupon payments and it's negotiating extension plans with those who have invested in Country Garden debt this is not great because it could be the signal of the start of that double dip housing crash in China what's worse is we thought evergrand was bad ever Grand by the way just filed chapter 15 bankruptcy in America that is for its U.S related debts it's already been a bankrupt company as it failed two years ago so it's kind of like old news we've seen it coming but they did just file chapter 15 just yesterday in the United States but what's worth noting is that Country Garden was building as many as four times the amount of properties and homes that ever Grand was that doesn't necessarily make them bigger but amount wise Country Garden is a massive developer in China now you're having serious concerns with a potential double dip housing crash which more housing pain leads to less consumer wealth we know this because Robert Schiller who's a famous economist famous for of course not only his research but also the case Shiller index as well as other predictions Robert Schiller has made it clear that it's not so much stock wealth that leads people to spend more or less than normal person or the average person spends more or less based on the value of the home that they own the same is true in America as in China now In fairness in China 90 of real estate is actually owned by the CCP but that's of land buildings are sold it to individuals and when you have a let's say you have no ownership of land and your building is now losing value in a housing market crash to where you're looking going well don't own the land the part that I own is losing so much value it tends to lead to some inward lookingness in other words people spending less money but not only are people spending less money because of a potential housing crash they're spending less money because they have less money to spend compare China's consumer stimulus to what American is received Americans were locked down for like three to six months okay in some lame States up to a year in China Chinese were locked down for up to three years what do we have in America an average of six thousand dollars of stimulus per person China on average five hundred dollars so in America we got 12 times the stimulus being locked down one third as long and now other companies are starting to burn their customers in China as well consider for example the company zhongzi Enterprise Group this is uh generally deemed to be a shadow Bank where you deposit money at this Shadow bank it's an investment company they're a private manager of about 137 billion US Dollars I've converted the currency uh and this company has halted payments to thousands of customers on some of their higher yield products where they were promising yields about twice as much as what local banks were offering and usually with higher yield comes a risk but let's just say what we don't need in China now is more bankruptcy restructuring and collapse if that's exactly what we're getting in fact behind the scenes this company has already hired KPMG to likely start their restructuring process they're also likely to dump Assets in the way of basically liquidating so they can finally make their Ponzi payouts this is a problem because then it lowers asset prices more stocks falling more real estate values falling and unfortunately the more stocks fall in China the more desirable they get for foreign investors to potentially buy the dip on Chinese stocks rather than American stocks it's all connected so something gets really really cheap in one area people flock to that rather than potentially American stocks which means potentially lower American Stock valuations as well but things are so bad in China that now you've got the police calling customers of this company the shadow Bank warning them not to protest at the same time the police is setting up aluminum fencing not chicken wire like seriously strong aluminum fencing around this company to prevent it from being attacked by the people who are frustrated that their promised payouts aren't coming but then again this is communism for you it's literally like the thought police they're calling you up just because you are thinking about protesting telling you not to and that you'll be arrested if you go protest because ultimately with too much protest comes a loss of government power and that's exactly what the CCP Communist party is afraid of now we'll see this company the shadow bank has filed uh statements on Friday that they've missed payments and that they're working with their customers especially next week on coming up with some kind of resolution for making these payments again but a lot of folks are saying look lower stock market housing market Falling Again country garden going under the shadow Bank starting to not be able to make payments and consumers not spending anymore this is the perfect setup for a double dip crash in China and unfortunately it is going to have massive implications throughout the world this is at least for now why foreign investors have dumped a lot of stock so far in China now and know that can be confusing because I said hey if Chinese stocks get cheap enough other people start buying in China instead of America this is true well right now we're still in the fall and since January 7.4 billion dollars in foreign purchases have been reversed and that's because of falling confidence that China is actually going to be able to prevent a real crisis here even Michael burry sold his Alibaba stock which he was Shilling for a long period of time so Where Do We Stand now well we actually stand at a real problematic Crossroads because not only do you have a lack of savings massive amount of debt especially local debt and high youth unemployment in some counts over 25 percent maybe closer to 20 if you believe the official numbers but now even those official numbers are being yoinked that is China won't be providing them anymore amplifying the distrust in the CCP that individuals already have but the government is stuck between a rock and a hard place in China why because get this the more China starts stimulating and China prefers corporate stimulus you end up getting more power amongst those corporations consumers aren't getting the stimulus maybe that would be a good idea but they're not and so far China is really just talking about lowering rates which they just announced and maybe some more top-line stimulus trickle-down economic style but China has a real fear that if you empower the corporations like Jack Ma and ant they will end up vocalizing their discontent with the government becomes so powerful that they could potentially overthrow the government so the CCP has to walk this fine line between stimulating but not over stimulating because then they might lose power but this is where you end up walking a even more dangerous line and this is where the problem of deflation sets in ready for this once you are in a cycle of deflation people distrust the government so much that even when you receive stimulus you don't end up spending it this is when you get to the failure of monetary policy this is what happened in Hungary and turkey where you have the monetary side printing money but nobody's spending it so you're actually staying in recession or in deflation while you're printing money and increasing your debt burden that is how currencies fail that is how governments fail that is how you create a deflationary spiral why is the deflationary spiral bad think about it companies stop hiring when companies stop hiring they stop being able to pay people as they stop being able to pay people people get laid off people who are laid off can't spend money people who don't spend money lead businesses to have to lay off more people and spend less money and this leads to ultimately less Innovation lower GDP for the long term and potentially a lost decade much like Japan had where you essentially have this extended recession slash depression and you actually can't print your way out of it Japan has been having this issue they've been printing money hoping to get out of this problem but they're not able to get out of the problem this is why Citigroup is now arguing that China is on track to basically japanify okay maybe that's not the perfect word to use but China's future growth prospects may be decelerating more sharply with growth enhancing structural reforms looking elusive we argue that China is on track for japanification based on policy responses delivered so far now China does have more groom to grow than Room to Grow than Japan did in the 90s but its productivity growth may be slowing more sharply undermined by the dominance of the state that's the power of the state above and beyond the corporation geopolitical headwinds drags associated with middle-income economies basically people being fearful to spend and China's demographic profile now deteriorating faster than Japan's did with a much lower level of per capita income in other words a slowing a slowing population growth if anything a declining population and number an aging population and those things happening worse than when it happened in Japan post their bubble all of this has led to some pretty crazy pieces take a look at this one foreign affairs the end of China's economic Miracle how beijing's struggles could become an opportunity for the West now I've highlighted some things in here that I'd like to point out the decline of China's durable goods consumption and private sector investment rates to a fraction of their earliest levels and by the country's surging household savings rate reflect the long-term loss of faith that people and companies have in the Chinese government and the country this unfortunately creates very deep problems it's worth noting that currently the savings rate household savings rate as a percentage of GDP has risen to 50 percent it's 17 in America now for a moment you might be thinking oh all people are saving more money that means they have more money to spend right maybe but they're fearful to spend that's the structural problem some are now calling this an economic case of long covid like economic long covet and that's because fear is coming in now it's of course reasonable to be fearful I mean they say here in the face of uncertainty and fear households and small businesses prefer cash savings to a liquid Investments as a result growth persistently declines now what kind of cash well actually the most desirable would actually probably be the dollar for China now there are capital restrictions you could only save about 50 000 USD but given that the per capita income in China is less than 50 000 USD per year and you're not going to save every dime this probably isn't a big deal for 99.9 of Chinese it's probably a bigger deal for uh people who are wealthier but for the average Chinese it's probably not such a deal and you could practically save money in US dollars or potentially crypto but crypto is going to be obviously a bit more volatile so potentially less likely of a choice for Chinese in the environment that we're in today instead people sit on the cache so they can get their hands on in the past citizens used to believe hey look as long as I don't get into politics no problem but unfortunately following what happened with Jack ma people are fearful that everyone is at risk and remember what happened during coven during covid somebody ended up with covet in your area guess what you had robots start flying around robotic drones shouting with megaphones to lock everything down and stay home and then you're arbitrarily left without income stimulus or customers for your business for months at a time thanks to the way the Communist Party handled lockdowns so of course you're going to have some fear when your government can pull this off but on top of that people's lack of spending is driven by the belief that people are at the mercy of the government's whims of a real estate bubble and fears of over-regulation fortunately we still have a lot more freedom in America although people are beginning to doubt that as well now it's also worth noting that policies can be enforced arbitrarily that is it's not even equal application of the law for everyone in China A lot can be driven by the party's will which actually sounds very familiar to some of the problems we have in America where a government party or an autocratic regime chooses to enforce laws against certain people and not others well once you lose that confidence in average people really difficult to win that back that's unfortunate for China because it's happening not just in one part of one party but it's happening across the board this could lead to a decades long drag on productivity and economic growth in China and when another Global recession hits unfortunately China isn't going to be able to help now foreign affairs believes that the best thing the United States could do was actually trying to accommodate China by being less restrictive and getting some more investment going into China and encouraging uh you know maybe intellectuals from China to come to America easing immigration policies and actually coordinating the economies more that would actually play into Kathy Woods argument that hey China can export lower inflation to the United States because we could take advantage of lower prices but our government today seems steadfast on the idea of separating itself from China and putting more barriers between us and China that was true during the Trump Administration it's true now with the Biden Administration both administrations were very fight China and Thai China This Is Not Great and of course some things we should definitely Harbor for ourselves like our artificial intelligence Technologies and some of our best military secrets and plans for the best weaponry and planes and otherwise of course that is one way that we can maintain some of our National Defense to the extent that we have National Defense but what does this really mean in terms of what's next well some say this could all be a blip that China will recover soon enough others say no China's actually going to have to go through a massive debt restructuring a big reset and only through a big reset can you actually end up regaining people's trust maybe you even need new politicians in China though that's probably only going to come through serious revolt and that's actually dangerous because it makes nuclear war a possibility the more China's economy falters the more dangerous the CCP becomes as it tries to grasp on Power and especially as they relate more to Russia as a way to balance out the West there is a greater risk of nuclear war with China the worse their economy gets Ray dalio says in his book principles that there are a few ways to have a debt restructuring you go through austerity which Europe went through post 2010 you could ask people to basically cut what they're expecting to get back from the government take a haircut on their loans you could redistribute wealth to the extent that they already haven't done so you could print money but that doesn't work if you have an already weak currency and people are in a deflationary mindset or you can boost productivity which is probably the best thing to do and it's what America does America can boost productivity and boost its GDP and Escape some of the deep debt problems that we have hopefully knock on wood that's the goal China seems like a less convincing story for real productive gains that is actually scary because it does mean that China could be a sandbag for Global GDP much longer but in addition to War what else is an issue well earnings consider that 25 of Nvidia AMD revenues come from China consider a large percentage of production that's completed by Tesla in China around 45 percent now they use China as an export market so maybe that's a way to take advantage of some disinflation but Starbucks apple Nike Under Armor Coke and many more companies rely on revenues from China a decline in sales here could offset the strength that the American Consumer is showcasing leading even America into a recession this is of course leading a lot of folks to avoid investments in China and sell-off investments in China in the short term but eventually that'll lead to by the dipping in China which is also a drag on the U.S stock market so what else do we consider well consider that there's a velocity of money globally that occurs when India and China trade less India has less money to invest in American companies trying to invest in India the same is true for other countries around the world China is a big anchor to the global economy so a great reset in China is going to be painful for the entire world it could end up being an opportunity for the United States if our economy grows enough but we're going to have to grow so strongly and so rapidly that we actually offset their anchor that is going to force the Federal Reserve to cut interest rates sooner than they're currently leading on in other words more pain in China more likely rate Cuts sooner but in the meantime be careful making bets on China because we just don't know where the bottom is yeith buy and sell alerts and the stocks and psych course real 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