Smart money’s looking beyond China stimulus debate – Asia Times

By:
On:
In: Asia

Businesses are resonating as a result of tension between President Xi Jinping’s long-term policy objectives and investor demand for short-term signal as Chinese securities recover.

The fight between the long and short viewpoints is not novel. For years, the” Washington Consensus” group has advised Beijing to adjust its unstable economy, which free market activists see as very reliant on giant, opaque state-owned companies and the vast incentives that sustain them.

However, restless investors who appear increasingly unwilling to give Beijing the room it needs to re-enter and overhaul its US$ 17 trillion market have frequently clashed with Xi’s work to do just that.

Until then, apparently. The conflict between Team Xi and anxious industry was clearly visible over the weekend.

Unplanned press conference by Xi’s Ministry of Finance ( MOF ) on Saturday ( 12 October ) sparked a frenzy with markets anticipating a potential significant new stimulus boost to help China reach its 20 % economic growth target for 2024 and new measures to combat the country’s increasingly ingrained deflation.

Futures markets sagged when MOF focused on larger transformation designs and declined to provide a certain amount label on the hung signal. But by Monday, companies rose.

Investors came to the conclusion that the MOF’s most recent statements reflect the pragmatism markets have long-craved from Xi’s inner circle, even if Beijing is n’t using its massive stimulus “bazooka.”

The trip news, according to economist Harry Murphy Cruise at Moody’s Analytics, “tied most of the appropriate boxes, but it lacked information on the size and range of new spending,” noting that” we anticipate more supports to be announced through the remainder of the year.”

Economist Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, says,” these policies are in the right direction”.

There is still a strong argument that Chinese stock valuations are now fairly valued despite the recent rally, which was buoyant from the US$ 6.5 trillion rout dating back to 2021. In addition, Chinese shares are currently trading at significantly lower multiples than those in the US, where new market highs are being made daily.

The MOF press conference was still a surprise to us, according to economist Jing Liu from HSBC Holdings, despite the lack of significant fiscal stimulus. ” The policy pivot looks very much here to stay, with the rising risk appetite having a significant impact on both the stock and property markets.”

Odds are, though, that this is a trust-but-verify moment for markets. Bullish investors are partially reacting to Beijing’s hints of further support for the troubled housing market and highly indebted local governments with new, targeted fiscal-spending jolts.

More and more stimulus is becoming more popular. In September, Chinese exports and imports came in weaker than expected, raising new doubts about the economy’s main bright spot. Overseas shipments, for example, rose just 2.4 % year on year, a sharp fall from August’s 8.7 % increase.

According to Capital Economics ‘ economist Zichun Huang, “further ahead… growing trade barriers are likely to become an increasing constraint” on export and economic growth.

Although the move from Washington to Seoul may cause more demand to be made in some of China’s key trading partners, according to economists, political restrictions on products like electric cars and other green technologies are causing new headwinds.

However, punters are beginning to realize that Xi’s inner circle is almost blatantly focused on bringing China into the so-called Fourth Industrial Revolution by accelerating the transition from the high-end to highly-value technology-driven industries.

Team Xi is more interested in the long-term benefits of tech-driven economic reinvention and future dominance of the industries. Although annual growth targets matter in the short run.

Investors are digging deeper into Chinese stock valuations in comparison to other top global markets and recognizing new value as a result of these caveats.

In the most recent Global Risk-Reward Monitor newsletter, Asia Times business editor David Goldman argues that with a price-earnings ( P/E ) ratio of 11, China’s stock market “is a bit too low”.

But at the same time, he notes,” there is no reason to expect Chinese valuations to approach the S&amp, P ( 500’s ) valuation of 22 times ( forward ) earnings”.

One reason, he argues, is that China’s government has gone out of its way to prevent and reverse the formation of market-skewing tech monopolies like Google, Microsoft or Amazon.

” No surprise, then, that Alibaba trades at a P/E of 27 after the run-up of the past month, versus Amazon’s 43″, Goldman writes. We have long argued that given subdued but consistent economic growth, China’s equity market valuation was too low. The Chinese market’s valuation seems more reasonable than that of the United States after the rally last month.

That’s not to say Beijing is n’t cognizant of the moment’s sensitivity. In a note to clients, economists at Morgan Stanley say this moment represents” Beijing’s second chance to convince the market” after a rough several days.

However, Xi may have found the balance between acting as a facilitator and a facilitator while also showing restraint.

According to Hui Shan, an economist at Goldman Sachs,” the most recent round of China stimulus clearly indicates that policymakers have turned to cyclical policy management and increased their focus on the economy.”

China will increase by 4.9 % this year, according to the US investment bank, up from an earlier forecast of 4.7 %. For 2025, Goldman Sachs sees growth of 4.7 %, up from an earlier 4.3 % forecast.

One source of Goldman Sachs ‘ optimism: MOF officials plan to deploy 2.3 trillion yuan ($ 325 billion ) of special local government bond funds in the fourth quarter of this year.

This, Hui says, suggests a more “back-loaded” public spending plan, paving the way for a bigger rebound than his bank had previously expected.

Last week, China ‘s&nbsp, National Development and Reform Commission announced pre-approval of&nbsp, 200 billion yuan&nbsp, ($ 28.2 billion ) worth of 2025 investment projects. It is seen by Huawei’s team as a clear government effort to help China meet its 5 % GDP goal this year.

Carlos&nbsp, Casanova, economist at Union Bancaire Privée, notes that investors are taking solace in Finance Minister Lan Fo’an highlighting that officials have a “fairly large” capacity to increase spending if needed.

That includes “implementing some of the most ambitious measures in years aimed at revitalizing the struggling property market, recapitalizing large banks,” according to Casanova, “everyone of which is crucial for addressing China’s ongoing structural challenges.”

However, Casanova adds,” the timeline for fiscal measures remains uncertain. The upcoming National People’s Congress Standing Committee meeting, scheduled for late October or early November, may require significant announcements to wait until.

The MOF “has given as strong a signal as possible while waiting for the NPC approval,” according to economist Shirley Ze Yu of the London School of Economics.

Larry Hu, Macquarie Capital’s chief China economist, doubts that Xi’s policymakers will be too specific about dollar amounts.

” First, they do n’t need to come up with such a number for the NPC to approve”, Hu says. ” Second, it’s hard to come up with such a number, as the line between fiscal, monetary and industrial policies is often blurred in China”.

Hu adds that, given the global financial crisis, it would go against Xi’s deleveraging goals of supplying the economy with stimulus the way Beijing did in 2008 and 2009.

Investors will be keenly focused on Beijing’s implementation of structural reforms, according to Hui of Goldman Sachs. &nbsp,

” The’ 3D ‘ challenges – deteriorating demographics, a multi-year debt deleveraging trend and the global supply chain de-risking push — are unlikely to be reversed by the latest round of policy easing”, Hui argues.

However, Oxford University’s China Center economist George Magnus is concerned that Beijing may continue to implement outdated policies.

” A solution would involve the sustainable expansion of the income and consumer demand shares of the economy, an end to deflation risk, more income redistribution, the promotion of private enterprise, and extensive tax and local government reforms”, Magnus writes in an op-ed for The Guardian.

Magnus adds that” Xi’s more Leninist agenda emphasizes supply and production, and what he calls’ high-quality development,’ which is essentially about state- and party-led industrial policies to allocate capital to lead and dominate modern science, technology and innovation in the global system”.

” China already has and wants to expand advanced industrial expertise and leadership in some key firms and sectors,” according to Magnus. These technologically dominant islands are found in a sea of macroeconomic imbalances and issues that can only be actually addressed by more liberal and open economic reforms.

Bottom line: According to Magnus,” the current focus on economic policy is important not for some decimal points on GDP but as a signal whether the government can, or wants to grasp the nettle.”

Magnus is not the only one who is concerned that policy tinkering wo n’t be sufficient. China will become a more dynamic and competitive economy over the long term if only the government sector is reforming, the capital markets are deepened, and households are encouraged to save less and spend more.

On the other hand, half measures will likely leave China vulnerable to boom/bust cycles brought on by the imbalanced allocation of resources, weak debt, and misalignments between household income and spending.

Investors will want to bereassured that big-picture reforms are on the horizon with the upcoming NPC. For now, though, an increasing number of investors are already getting the memo on China’s grand plan.

Follow William Pesek on X at @WilliamPesek

Continue Reading

Small businesses, big challenges: The reality of China’s post-US Fed cut economy

By:
On:
In: Asia

Additionally, analysts told CNA that the effect on small businesses would probably be generally direct and minimum. According to Mr. Bell,” I do n’t think Fed cuts will have much impact on Chinese consumers,” adding that” small businesses with a domestic focus are less impacted,” while citing low domestic confidence as a limiting factor. &nbsp,

” Frequently, small businesses and individuals are shielded from immediate effect by broader plan adjustments”, said American economic columnist Mr Daryl Guppy, even the CEO and founder of Guppytraders.com.

He noted that US economic policy may have a far greater impact on Chinese usage habits than US tariffs and punishment. &nbsp,

The main effect may be price changes for imported American items.

Next THE FED?

China’s central bank has implemented a number of smaller cuts, including a policy interest rate reduction of 0.2 % and a reduction of banks ‘ reserve requirements by half a percentage point, despite the Fed’s aggressive stance in cutting rates. &nbsp,

However, Mr. Guppy made it clear that the PBOC’s actions did not directly affect the US’s subsequent actions. &nbsp,

According to Mr. Guppy,” PBOC policy decisions are not made in a knee-jerk effect to US policy.” Lower rates often lead to a higher consumer and business confidence because they lower the cost of loans and paying off debt.

Experts believe Beijing’s factual response to the US Fed price cuts could also provide some much-needed information into its possible future actions.

According to Mr Bell, China generally “has had a very distinct economic policy platform than the Fed’s interest-rate focused strategy”.

” For much of the early 2000s, China pursued a dollar nail, and after that, a much more quantity-driven model focused on the quantity of credit rather than their cost”, Mr Bell told CNA. &nbsp,

He also explained that China was “more insulated”, because of its relatively” closed” investment account, at least until 2015, which helped it experience fewer spillovers from international financial situations. Companies and individuals are prohibited from moving money into and out of the country under strict regulations in a sealed capital account.

China focused on a lot of fiscal and credit stimulus when extreme crises struck and threatened to spread through the trade channel.

Some believe that Chinese politicians should concentrate on resolving these internal problems, such as revitalizing the faltering business, which may call for a more subtle approach this time around.

” China’s emotions are tempered by the demands of the local economy and policy information”, he said. ” US Fed rates movements are a factor that may make it easier, or more difficult, ( for China ) to continue with an appropriate domestic policy”, said Mr Guppy.

Although Mr. Bell believes that China” should not be in a location where Fed moves matter little,” he also acknowledges that “any global circumstances,” including Fed rate policy, had have” a more important impact on the Foreign economy.”

” But that is not a given, many more a representation of lacking plan activities in Beijing”, Mr Bell added. &nbsp,

Continue Reading

Police question iCon CEO, celebs

By:
On:
In: South-East Asia

‘ Boss Paul ‘ pledges to support victims, denies he oversaw a pyramid system

Warathaphon “Boss Paul” Waratyaworrakul, 41, CEO of The iCon Group, turns himself in to consumer protection police on Saturday. (Photo supplied/Wassayos Ngamkham)
Warathaphon” Boss Paul” Waratyaworrakul, 41, CEO of The image Group, turns himself in to client security officers on Saturday. ( Photo supplied/Wassayos Ngamkham )

Police detained The image Group CEO Warathaphon” Boss Paul” Waratyaworrakul on Saturday, promising to assist the hundreds of people who have complained about the website selling business’s falsification.

Mr Warathaphon, accompanied by his lawyer, reported to officers at the Consumer Protection Police Division ( CPPD ) who are seeking a warrant to arrest him on fraud charges.

The Anti-Money Laundering Office ( Amlo ), meanwhile, said it was looking into the possibility of freezing the company’s assets pending the outcome of police investigations.

Mr Warathaphon, 41, said he was saddened upon learning that a number of people had suffered losses from investing in the bank’s direct selling company. He even acknowledged that earlier should have been used to address their issues.

He claimed that in order to assist these people, he intended to find a trustworthy individual to manage the operation of a center the business is setting up to provide assistance and payment.

He defended the decision as a humanitarian and socially responsible action while claiming that his direct sales company is completely transparent and responsible.

” I have been building this business for the past six years, and I have protested my sincerity,” Mr. Warathaphon told investigators. And I do n’t believe that doing so would ever make a person illegal to sell goods online. Numerous another businesses are doing the same thing.

He declined to say whether the stars who are alleged to be deeply involved in iCon’s business activities are even business professionals as some have claimed.

He claimed he had fully explained the company’s operations to the authorities and that he would prefer not to make the information people.

When questioned about whether he believed the significant costs that the broken functions reported to the police were the fault of his company, he said that must be supported by evidence.

He also refuted reports that he had previously reached a settlement with Sittra Biabungkerd to pay Sittra Biabungkerd’s full payment to a number of users the prosecutor claimed to represent. He claimed the attorney had not spoken to him and that he had never known Mr. Sittra.

Almost 500 issues

By providing website marketing programs for less than 100 ringgit, the iCom Group attracted a lot of people. However, when they enrolled, respondents claimed that they were asked to spend significantly more money on purchasing health substitute products to sell. After that, they were asked to pay for fees-paying online advertising to attract new users.

According to Pol Maj Gen Sophon Sarapat, deputy chief of the Central Investigation Bureau ( CIB ), which oversees the consumer protection police, the number of people filing fraud complaints with the police had reached 488 as of Saturday, with losses of 178 million baht.

Although records of how the company operated appeared to fit the definition of common scams, Mr. Warathaphon was never charged and was given the opportunity to leave after being interrogated.

Thephasu Bowonchotidara, secretary-general of the Amlo, confirmed that officers had asked it to look into the trades and resources of The image Group. &nbsp, Amlo researchers have now notified the lenders concerned, he said.

If the original data clearly points to scam, a suspect’s property can be seized to stop them from being siphoned off or shifted pending the outcome of studies, said Wittya Neetitham, an Amlo official.

In another growth, Kan Kantathavorn, a well-known TV host and artist who was identified as the marketing director of The image Group, claimed he was just hired to perform public relations for the business under a lease that he has already terminated.

He added that he had checked to make sure that every product he was hired to review was legitimate and safe for consumers before going on to actually test it out for the audience.

Yuranunt” Sam” Pamornmontri and Pechaya” Min” Wattanamontree, two other celebrities linked to the company, were also seen reporting to CPPD investigators on Saturday.

According to a reliable source, police searched nine locations in Bangkok and the surrounding provinces for more evidence earlier this morning.

The Medical Council of Thailand, meanwhile, said it could lodge a police complaint against Tananont Hiranchaiwan, another iCon executive, who always presented himself in public as being a certified medical doctor. He has a medical science degree, but it was claimed that he lost his medical license six years ago.

Yuranuant “Sam” Pamornmontri, reports to Consumer Protection Police Division (CPPD) investigators on SSaturday. (Photo: Wassayos Ngamkham)

Yuranunt” Sam” Pamornmontri reports to Consumer Protection Police Division ( CPPD ) investigators on Saturday. ( Photo: Wassayos Ngamkham )

Continue Reading

Mun River overflows, flooding farms, low-lying areas in Phimai

By:
On:
In: South-East Asia

Discussed: 12 Oct 2024 at 12: 52

Agricultural areas and other low-lying areas in Phimai district, Nakhon Ratchasima, are inundated after the Mun River burst its banks on Saturday morning. (Photo: Prasit Tangprasert)
Agricultural locations and different low-lying areas in Phimai area, Nakhon Ratchasima, are inundated after the Mun River burst its institutions on Saturday night. ( Photo: Prasit Tangprasert )

NAKHON RATCHASIMA: &nbsp, The Mun River burst its institutions on Saturday night, sending a large volume of water to storm rice fields and low-lying places in Phimai area.

In a number of areas, especially downstream of Phimai Dam, the river’s water levels were higher.

The Thung Samrit water operation and maintenance project’s six pipe gates were closed, preventing water from entering the Mun River and protecting monetary areas from flooding, because the dam’s holding capacity was increased by 3. 6 million cubic meters.

However, the Mun River’s water release caused major flooding in some rice grounds and low-lying areas in the tambons Nai Muang and Tha Luang.

Farmers expressed concern that if the floodwaters do n’t recede soon, their paddy plants, which are currently in the grain-yielding stage, could suffer significant damage. They pleaded with condition authorities to immediately assist them.

Continue Reading

35 people arrested for suspected involvement in government official impersonation scams

By:
On:
In: South-East Asia

According to police, the connection between the following scammer and the victim could eventually be moved to messaging services like WhatsApp. &nbsp,

” In some cases, the scammers properly hand out bogus official documents or warrants to support their deception.

SPF said that the scammers would accuse the target of being involved in criminal activity, such as money laundering, and request that the victim exchange funds to” safe accounts” designated by the government to support investigations.

The survivors would only become aware that they had been defrauded when the “officials” became inaccessible or when they requested verification of their circumstances ‘ status with the police or businesses.

The Police take a very critical position regarding these crimes and will not hesitate to take legal action against those who may be involved in fraud, according to SPF.

Those who use their bank balances or Singpass credentials to evade detention may be sentenced to at least six months in prison, according to the Sentencing Advisory Panel‘s recommendations.

According to the police,” The judges also have the discretion to increase sentences if aggravating factors, such as the presence of vulnerable victims,” are present.

Continue Reading

How Xi’s crackdown turned China’s finance high-flyers into ‘rats’

By:
On:
In: Asia
Getty Images Businessman against Chinese flag in double exposure.Getty Images

” Then I think about it, I certainly chose the wrong market”.

Xiao Chen*, who works in a private equity firm in China’s economic hub, Shanghai, says he is having a hard time.

For his first year in the job, he says he was paid almost 750, 000 yuan ($ 106, 200, £81, 200 ). He was certain he would quickly reach the million-yuan level.

He is now making half of what he did when he was younger. His earn was frozen next year, and an annual extra, which had been a major part of his earnings, vanished.

The “glow” of the business has worn off, he says. It had previously made him “feel fancy”. Today, he is just a “finance rat”, as he and his contemporaries are derisively called online.

China’s once-thriving sector, which encouraged ambition, is now slow. The government’s leader, Xi Jinping, has become afraid of personal success and the difficulties of widening injustice.

Reprisals on billionaires and firms, from real estate to technology to funding, have been accompanied by socialist-style communications on enduring pain and trying for China’s success. Even famous people have been instructed to post more photos electronically.

People are told that loyalty to the Communist Party and their country then outweighs personal ambition, which has altered Chinese community in the last few decades.

Mr. Chen’s luxurious lifestyle has undoubtedly experienced the pinch from this U-turn. He exchanged a cheaper vacation in South East Asia for a vacation in Europe. And he says he “would n’t even think about” buying again from luxury brands like” Burberry or Louis Vuitton”.

But at least ordinary workers like him are less likely to find themselves in trouble with the law. Dozens of finance officials and banking bosses have been detained, including the former chairman of the Bank of China.

The market is under strain. Give reductions in banks and investment companies are a hot topic on Chinese social media, despite the few companies that have formally acknowledged it.

Millions of views have been posted on content about falling incomes recently. Additionally, hashtags like” changing careers from fund” and “quitting financing” have received more than two million views on the well-known social media platform Xiaohongshu.

Some finance professionals have seen their money decline since the start of the epidemic, but some people view one popular social media post as a turning point.

In July 2022, a Xiaohongshu person sparked anger after boasting about her 29-year-old father’s 82, 500-yuan monthly spend at leading financial services business, China International Capital Corporation.

People were shocked by the significant wage gap between what a fund contractor was receiving and their own money. The average monthly salary in the country’s richest area, Shanghai, was just over 12, 000 renminbi.

It sparked a discussion about incomes in the field that had been started by another net users who made money earlier that year.

These posts were made shortly after Xi demanded” common wealth,” a plan to close the growing wealth gap.

China’s financing ministry issued new regulations in August 2022 that required businesses to “optimise the domestic income distribution and medically design the wage system.”

The following season, the country’s major problem watchdog criticised the ideas of “finance elites” and the “only cash matters” process, making funding a clearer target for the country’s continued anti-corruption campaign.

Getty Images Shanghai skyline.Getty Images

The changes came in a sweeping but discreet way, according to Alex*, a manager at a state-controlled bank in China’s capital, Beijing.

Even if there is an official document, you would not see the order put into writing; it’s certainly not for people on our level to see it. But everyone knows there is a cap on it ]salaries ] now. Simply put, we are unsure of the cap’s size.

According to Alex, employers are also having a hard time adjusting to the rapid pace of the crackdown:” Many banks ‘ orders could change unexpectedly quickly.”

By June or July, they would realize that the payment of salaries has exceeded the requirement, according to them. They would issue the annual guidance in February. Then they would develop methods to establish performance goals that would take people’s pay.”

Mr. Chen claims that his workload has decreased significantly as fewer companies have started trading shares on the stock market. Domestic businesses have also become cautious in China as a result of the crackdowns and weak consumption, and foreign investment has decreased.

In the past, his work frequently involved new initiatives that would generate revenue for his business. His days are currently primarily filled with chores, such as organizing the data from his earlier projects.

” The team’s morale is very low, and most discussions with the bosses are negative,” the team said. In three to five years, people are discussing what to do.

Although there have been some layoffs, it’s difficult to say whether people are leaving the industry in large numbers. Jobs are also scarce in China now, so even a lower-paying finance job is still worth keeping.

But the frustration is evident. Switching jobs and changing seats were compared by a user on Xiaohongshu, but he warned that if you stand up, your seat might be gone.

Mr. Chen claims that Chinese society in general is at odds with the authorities and that it’s also true that finance workers are at odds with the authorities.

” We are no longer wanted, even on a blind date.” Once they learned that you worked in finance, you would be advised not to leave.

The finance workers ‘ names have been changed to protect their identities.

Continue Reading

Victims file fraud complaints against iCon Group

By:
On:
In: South-East Asia

Cheap online classes were used as a pretext to entice candidates who were later asked for more and more income.

A woman tells reporters about her investment with a firm running an online business as she joins about 20 others to file a fraud complaint against The iCon Group with consumer protection police on Thursday in Bangkok. (Photo supplied/Wassayos Ngamkham)
A person tells investigators about her investment in a company that runs an online business as she joins about 20 people to file a fraud problem with Bangkok’s consumer protection officers on Thursday. ( Photo supplied/Wassayos Ngamkham )

A lawyer has expressed confidence that some stars serving as its professionals will be prosecuted for operating a pyramid scheme as The image Group, a well-known online business producer, has become the target of fraud problems.

More than 20 people on Thursday filed complaints with Consumer Protection Police Division ( CPPD ) investigators. They were accompanied by Raphatsit Phattarasirichaisin, a attorney and deputy president of a base fighting to regain social fairness.

One of the victims reported to reporters that she first saw The image Group’s website business course for 50 to 100 people with tuition costs of only 98 to 99 baht per student.

She was curious and applied. Business mentors told the individuals that while they could help investors make extra money, they had to spend 2,500 baht each to receive the goods after she had spent three days at the course. The coaches promised that the company may offer marketing strategies to promote the products.

Celebrities often showed up at occurrences promoting the agency’s company, said the girl. She met three stars and noted that they were called “bosses”, never product participants. To go each occasion, participants had to give 1, 500 baht.

The girl claimed that at first, she did not have enough money to invest in the company. One instructor advised her to get in touch with lenders to request extended lines of credit so she can invest more money and make hefty profits. She then poured all of the funds and saving she had borrowed from her credit accounts into the business.

She eventually learned that the funds she invested was not intended to be used to purchase goods to sell. Otherwise, she was ordered to pay for social media ads to inspire people to use to become dealers or customers. She may be charged for their hiring.

Finally, the girl grew cautious, as she and another had not been taught how to promote products but instead had been persuaded to attract people to invest.

She claimed that she had already incurred significant debt and that the goods she received from the company was no longer be sold.

Another target claimed that because he had invested more than 200 000 ringgit in borrowed funds, he had considered suicide.

According to Mr. Raphatsit, the 20 accusers constituted one in 500 people who were connected to the business.

He demanded that the police look into whether the company’s business model constituted a pyramid scheme or a form of common forgery.

Some victims had filed problems with police previously but there was no-follow-up, said the lawyer. Some people had contacted people they believed could have some effect in negotiating with image.

After the talks, the company returned 50 % of the money they had invested, but they had to sign paperwork that they would not report problems with police, said the lawyer.

The Office of the Consumer Protection Board had come to the conclusion that the company’s business model was not in violation of the law, according to Mr. Raphatsit.

But there must be a more rigorous investigation, said the lawyer. ( Story continues below )

Lawyer Decha Kittiwitthayanan says some celebrities involved in the alleged online business scam will be prosecuted. (Photo supplied/Wassayos Ngamkham)

Lawyer Decha Kittiwitthayanan, who is helping the forgery accusers, says some stars involved in the reported online fraud may be prosecuted. ( Photo supplied/Wassayos Ngamkham )

Celebrity attorney Decha Kittiwitthayanan likewise visited 10 admitted pyramid scheme victims on Thursday to file a complaint with the symbol Group.

He claimed that there was a good possibility that some famous people involved in the online industry may be charged. He declined to give them a brand.

The virtual organization in issue focuses on health products and features well-known professionals and artists such as Yuranunt” Sam” Pamornmontri, Kan Kantathavorn and Pechaya” Min” Wattanamontree.

The company, according to Thankhun Jitt-itsara, who likewise accompanied the sufferers, provided inaccurate information about its online business and inflated advertisements that swayed investors.

The company originally persuaded people to invest 97 ringgit per head for its purchase program in order to draw victims. For those who wanted to become dealers and form a sales staff with a guarantee of more income, the investment amounts steadily increased to 250, 000 ringgit per head, according to Mr. Thankhun.

Eventually, the company persuaded investors to make buy advertisements to attract more customers. On average, each man had at least 500, 000 ringgit in loss, he said. Thus far, about 500 people have sought legal aid from Mr Decha, said Mr Thankhun.

After news outlet Kanchai” Noom” Kamnerdploy made an admission to a scandal surrounding a well-known direct sales business that allegedly used prominent Thai celebrities as presenters to create a community and persuade customers to pursue investment opportunities, the case has sparked a social media stir.

Some people allegedly did n’t get the things that were promised or advertised.

Continue Reading

No China stimulus? Time to buy – Asia Times

By:
On:
In: Asia

It’s a wonderful time

Clouds falls, you feel like

It’s a wonderful time

Don’t let it get ahead

– U2

Do not get Taiwanese companies because you think a big fiscal stimulus is coming. Get Chinese shares because a big fiscal signal is not needed.

The bull situation for Chinese stocks is not that stimulus may save the economy. The bull event for Chinese stocks is that homeowners are sitting on US$ 20 trillion in payments with nowhere to go.

The managed destruction of the property market is ongoing. Authorities have curtailed money management products and their inherent guarantees.

Money controls prevent easy access to foreign goods. And the coming storm of high-tech technology companies in clean power, semiconductors, aviation, robotics and biotech will have a lively equity market to get off the ground.          

China ’s economic transformation will be ill-served by flood-the-zone stimulus which – if we recall – is what got us the real estate bubble and subsequent “three red lines ” credit limits in the first place. What China ’s economic transition needs is better execution of “establish the new before abolishing the old. ”

What if we generate of China ’s new stimulus methods? The grab bag of goodies – reserve requirement ratio ( RRR ) cut, lowered interest/mortgage rates, special local bond sales, cash for clunker programs– are all bullets pointing in the same direction. But the power falls well short of a bazooka.

Trillions of renminbi ( RMB) in fiscal stimulus have been dangled but apparently withheld given the non-meeting held by the National Development and Reform Commission ( NDRC ) after the holidays. What has been offered will help China achieve 5 % gross domestic product ( GDP ) growth this year, hardly a lofty goal.

The only interesting policy is the People’s Bank of China ’s ( PBOC ) unexpected support for equity markets through 1 ) a collateral replacement scheme to increase risk assets at institutional investors and 2 ) a program to encourage bank lending for share buybacks.

While some ascribe this to an effort to drink consumer confidence, the likelier inspiration is an effort by the PBoC to redeploy some of China ’s$ 20 trillion in family bank deposits.

China ’s roaring property market in the past couple of weeks has given the box of laws a vote of confidence. Note that private marketplaces are behaving far more sensibly than global markets.

China ’s markets took one year off from October 1-7for National Day breaks – enough time for global markets to roll wild and unrestrained thoughts about fiscal stimulus of RMB2 trillion, RMB4 trillion, RMB6 trillion and RMB10 trillion.

The following pain in Chinese stocks traded in Hong Kong and through global ETFs occurred in Shanghai and Shenzhen after industry reopened.

Properly attributing local business confidence is of course unthinkable. Low prices from beaten down shares provide a healthy surface.

The NDRC non-meeting may include lanced the cook of huge trigger expectations. The business has good determined that China is severe about utilizing capital markets. What it needs to figure out then is that China ’s financial woes are not as grave as made out to be.

How well has President Xi Jinping managed China ’s market? Much of the company hit is predicting Japan-style stagnation, if no inevitable decline. That, of course, has been the situation for years.

According to one famous China-based economist’s 2015 forecast, President Xi’s financial performance may have earned him God Emperor standing in the mythology of China ’s socialist officials:

My assumption is that, under President Xi’s name, 2013-2023, common growth rates are unlikely to reach 3-4 %. That’s not my prediction, that ’s the upper limit of my prediction… I think that if President Xi is able to pull off average growth rates of 3-4 % during his 10 years in office, he will have accomplished something that we should really be astonished. It would be truly impressive, almost on par with what Deng Xiaoping did in the 1980’s …

In President Xi’s first two conditions, China ’s economy grew at a 6. 2 % compound average growth rate ( CAGR ), nearly double the upper limit of said predictions. China substantially outgrew all major markets except India. Somehow, our analyst was hardly twice as dismayed.

Perhaps it was President Xi’s personal problem, extending his time in office past the usual two five-year words. Alternatively of graduating with double starred first accolades from our scholar, Xi has only extended his experiments trying to earn an extraordinary triple or even a double starred second.

Graphic: Asia Times

Han Feizi’s assessment of President Xi’s economic performance is considerably less generous. Economic growth of 6. 2 % CAGR in Xi’s first two terms is not at all astonishing; it was, in fact, modestly below expectations ( Covid 2000 to 2022, what can you do? ).

Han Feizi did not and does not share our Beijing economist’s bleak assessment of the economy that Xi inherited and thus cannot grant bonus points for outperformance:

[President Xi] inherited a much more difficult economy than we think. There’s a huge amount of debt. There’s a huge amount of unrecognized bad debt.                

While China did take on a lot of debt and take it on quickly, Han Feizi fundamentally disagrees that the amount of debt and the quality of the debt is all that problematic.

It has been his correspondent’s contention that the size of China ’s economy is significantly understated compared to OECD national accounts ( see here ).

China ’s debt-to-GDP ratio is, thus, closer to ~125-200 % instead of the often quoted ~300 %. Moreover, this debt largely financed housing and infrastructure – long-lived assets with relatively low maintenance capital – able to generate value for decades.

China still has 15-20 % of the population to urbanize. Given urbanization of 1 % of the population per year, overbuilt housing should naturally resolve itself by kicking the can down the road.

As such, China ’s debt is nowhere near capacity. Xi inherited an economy headed in the wrong direction, not an economy out of runway. With property investment hobbled by redline credit limits in 2020, China nonetheless continued to grow 5 % by redirecting lending to advanced manufacturing.

A sentiment that Han Feizi might share with our Beijing economist is that Xi’s record is incomplete. No marks can be given until he sees things through. Things being another transformation of China ’s economy and society, which Han Feizi has written about before ( see here ):

China wants America’s Silicon Valley but regulated, Japan’s car companies but electrified, Germany ’s Mittelstand but scalable and Korea’s Chaebols but without political capture. It wants to lead the world in science and technology but without cram schools. A thriving economy but with common prosperity. Industry without air pollution. Digital lifestyles without gaming addiction. Material plenty without hedonism. Modernity without its ills. This is, of course, a wish-list and unrealistically ambitious. But these mad scientists sure as hell are going to try. They’ve developed a taste for it.

Various pieces of this transformation have started to take shape. The anti-corruption campaign under Xi’s tenure has been unyielding and dare we say transformative. China ’s once low-trust and loutish public of the Jiang Zemin and Hu Jintao eras is now unrecognizable, able to sustain high-trust business models like shared bikes and take-only-what-you-paid-for vending machines ( see here ).

The professional environment for China ’s young grads is surely far less treacherous than the get-rich-quick-at-any-cost mentality of the go-go days.

Output from the “new three” industries – solar, batteries and EVs – are surging, although capacity appears to be growing even faster. Deflation across multiple sectors has set off alarm bells. Although not ideal, China ’s deflation is fundamentally different from Japan’s in its lost decades.

Simplistically, deflation caused by decreasing consumption ( demand curve shifting in ) is bad; deflation caused by increasing production ( supply curve shifting out ) is good.

Unlike Japan, which suffered two recessions in the 1990s, demand in China is still growing, if weaker than optimal. Japan’s deflation started when Tokyo was the most expensive city in the world with cantaloupes selling for$ 100 each. This is not the same deflation China is currently dealing with.

China ’s real disposable household income grew 6. 1 % in 2023. In recent years, regulators have crimped the income of previously high-flying professionals in finance, tech and real estate. Upper-tier income growth has stalled while lower-tier income growth has been robust.

Economist Simon Kuznets ’s prediction that inequality would rise in the early stages of economic development before peaking and falling as wealth increases is playing out perfectly in China while it confounds expectations in more capitalist economies.      

Graphic: Asia Times

And, of course, Han Feizi does not believe China ’s economy is egregiously unbalanced ( perhaps not even unbalanced at all ) and thus has no need for massive consumption stimulus.

This is the key reason Han Feizi was not “astonished ” by China ’s ability to maintain growth over 6 % in Xi’s first two terms. There is no need for consumption to outgrow investment to signal economic health ( see here ) and thus no need for massive consumption stimulus.

China ’s regulators and anti-corruption investigators have ransacked the nation’s banks and brokerages and detained high-profile bankers, attempting to put a leash on an industry with a natural tendency to run amok. The PBoC’s support for equity markets may signal confidence in the clean-up work recently performed.

So yes, buy Chinese stocks. Valuations are still cheap, and$ 20 trillion of savings has nowhere to go. Equity markets are being prepared for China ’s high-tech future.

Growth is more sustainable in a high-trust and more equal society. No there will not be a massive consumer stimulus. But that is precisely why you should buy, not sell, China.

Continue Reading

The World Bank isn’t buying China’s stimulus talk – Asia Times

By:
On:
In: Asia

To anyone who hopes 2025 will be a less terrible season for China’s economy, the World Bank has some bad news for you.

The international lender anticipates that Asia’s largest economy’s growth will decline also further next year, creating new headwinds for the region. This is in spite of Beijing’s current moves to boost economic growth in response to negative pressures and an initial global investor response that was at least initially passionate.

” Just signaled fiscal support may raise short-term progress, but longer-term development will depend on deeper structural measures”, the World Bank said on October 8. For three years, it said,” China’s expansion has spilled over advantageously to its companions, but the size of that motivation is today diminishing”.

The World Bank might be misinterpreting China’s efforts to resurrect its financial situation. It&nbsp, cut borrowing costs, slashed businesses ‘ supply need numbers, reduced loan rates and unveiled market-support resources to put a floor under share costs. In Beijing, stronger macroeconomic stimulus measures are also being considered.

If the world’s house crisis is allowed to enhance, furthering negative forces, some economists worry about a lighter course. The uncertainty issue is demonstrated by the extreme volatility in Chinese shares over the past ten days.

When the World Bank mentions the need for “deeper architectural changes,” plunging house prices are at the top of their record. Yet&nbsp, Chinese leader Xi Jinping appears to think period is on Beijing’s part in repairing the critical business. It might not be, as Japan has demonstrated over the years, &nbsp, some economists say.

China’s existing real estate troubles and Japan’s negative loan problems of the 1990s are n’t essentially analogous. The important resemblance is a critical driver of economic growth stalling out indefinitely, triggering bad knock-on implications in different industries.

In China’s situation, this likewise means municipal governments around the country. Provincial leaders have relied on area sales and tax revenues from sizable construction projects for many years.

” China’s boom-and-bust housing market is largely driven by local governments ‘ heavy reliance on expanding the real estate business to provide a major source of income”, said Tianlei Huang, an analyst at the Peterson Institute for International Economics, a Washington-based think tank.

Since 2022, Huang added,” the decline in the housing market has hurt native state funds and exposed a&nbsp, prone system&nbsp, in need of reform”.

It’s a portrait of what ails China. And still, Xi’s Communist Party continues to treat the signs of financial issues, not the underlying problems themselves. The longer they fester, the stronger the resulting headwinds.

Rather than the 4.8 % the World Bank sees China’s economy growing this year, it sees the nation expanding at just 4.3 % in 2025. Both readings are below Beijing’s current 5 % target.

Of course, for an economy at China’s level of development, 4.3 % is effectively recession territory. And if Xi’s team does n’t act boldly and expeditiously to revive growth, that figure could prove too optimistic.

One wildcard is the&nbsp, November 5&nbsp, US election. The upcoming trade wars would disproportionately hit China if Donald Trump were to win.

During his first presidency from 2027 to 2021, Trump imposed harsh tariffs on China. Xi’s government has n’t seen anything yet if Trump comes back to power. Trump has already predicted a generalized global levy on all imports into the US and a 60 % tax on all Chinese goods.

” With higher US tariffs, a number of highly open economies in the Asia-Pacific are at risk of GDP falling below their baselines”, said Deborah Tan, an analyst at Moody’s Ratings. Along with China, they include Malaysia, Singapore, South Korea, Taiwan and Thailand.

According to Tan,” these are primarily economies with high participation in global value chains and high exposure to US and Chinese intermediate goods supply and final goods demand.”

Vietnam, for example, has a high export share of gross domestic product ( GDP ) with strong linkages with&nbsp, Chinese manufacturing&nbsp, supply chains. ” Our simulation shows that within Vietnam, the high-tech goods sector will take the largest hit to output”, Tan said. ” China, similarly, the high-tech goods sector takes the largest hit to output followed by the low-tech goods sector”.

As this threat percolates, Xi’s team in Beijing risks losing even more trust among global investors.

One thing is to discredit them on the stimulus front. The slower pace of fixing the housing sector, strengthening local government balance sheets, and establishing social safety nets so that households save less and spend more are the bigger issues.

However, these measures “do not replace the more thorough structural reforms that are required to promote longer-term growth,” according to World Bank economist Aaditya Mattoo. The majority of the measures and bond proceeds will carry over into the following fiscal year given the lead time for implementation of the policy.

Mattoo notes that “even then, consumers may be reluctant to splurge because a one-time transfer would not boost longer-term incomes or address concerns about aging, illness and unemployment”.

In the interim, billionaire Ray Dalio sees this as Xi’s party’s “do what it takes” to change the gloomy narrative that may be evoking global investor sentiment. Draghi’s 2012 declaration as head of the European Central Bank is referenced here.

Last week “was a big week” ,&nbsp, said Dalio, founder of Bridgewater Associates. ” In fact, I think that it was such a big week that&nbsp, it could go down in the market-economic history books as comparable to the week Draghi said that he and the ECB would ‘ do whatever it takes,’ if China’s policymakers, in fact, do what it takes, which will require a lot more than what was announced”.

A long-time China bull, Dalio is increasingly vocal about his worries Beijing is sleepwalking into a&nbsp, Japan-like funk&nbsp, that history shows is challenging to exit. It’s taken Tokyo 25 years to begin exiting quantitative easing and its zero-interest-rate policies, and even that is proving challenging for the Bank of Japan.

To avoid it, one must devise a “beautiful deleveraging” strategy that balances printing enough yuan to support growth without causing inflation to rise too quickly while restructuring the entire economy. ” Doing these things starts to rekindle’ bottom fishing ‘ ]in stocks ] and ‘ animal spirits,'” he said. ” That is clearly happening right now,” he says.

Any new deleveraging efforts by Xi and Premier Li Qiang, Dalio said, will undoubtedly disorient and likely lead to more wealth destruction. That, it follows, will require considerable political courage, with Xi and Li having to decide where the costs and fallout of debt losses will be concentrated.

To Dalio, it all depends on “how well China’s domestic debt-money-economy challenges will be handled”.

At the same time, demographics are complicating the deleveraging process. The numerous moving parts that Xi and Li are struggling to manage are given a unique dimension by China’s aging population and shrinking working-age population. &nbsp,

” While last week saw some amazing actions and words that I’m certain will be followed by highly stimulative policies that will greatly boost asset prices,” Dalio said.” I think there are several important other things to keep an eye on to see how well China’s domestic debt-money issues will be handled,”

That’s not to say there are n’t some reform wins that Xi and Li can tout. As Sherry Zhao, analyst at&nbsp, Fitch Ratings, pointed out, refinancing risks for China’s local-government financing vehicles ( LGFVs ) have “reduced in the short term following government debt-relief measures and policy support, which will limit systemic risk”.

Provincial governments, Zhao said, continue to issue special refinancing bonds to swap “hidden debt”. The central government, meanwhile, has increased transfers to shoulder more infrastructure spending.

However, Zhao stressed,” we believe those support measures focus on the prevention of short-term&nbsp, systemic risk rather than a full-scale bailout. There continue to be longer-term risks associated with&nbsp, LGFVs ‘ debt burdens, and their resolution will hinge on China’s overall economic and fiscal strength”.

The Third Plenum meeting in July made it clear that local and regional governments may have more revenue flexibility to better accommodate their expenditure demands. ” The credit effects”, Zhao said,” will depend on how the changes are implemented, and on local governments ‘ willingness to use any additional revenue-raising powers given to them”.

The official Fitch view is that overall&nbsp, LGFV&nbsp, debt growth will be curbed as local governments tighten control of new debt, especially in regions that Beijing views as a priority for debt resolution.

The danger, however, is that these regions ‘ long-term debt default risk “remains and may even rise because of imbalances in economic and debt growth, as well as the potential inability of local governments to generate sustainable revenue for debt service.”

There are encouraging indications that China is currently developing a plan to stabilize the financial system and lessen risks.

Zheng Shanjie, the head of the National Development and Reform Commission, told reporters on October 8 that Beijing is developing” comprehensive policy measures to help stop the decline in the real estate market.” Shanjie said this in response to the National Development and Reform Commission’s announcement to stop housing sales and prices.

Zheng added that” we will take a number of potent and effective measures to try to boost the capital market in response to volatility and declines in the stock market.”

Even so, many economists and investors were disappointed that more short-term stimulus is n’t being deployed. ” Tuesday’s press briefing from China’s top economic planner … was supposed to be the big moment, the one where Beijing unleashed a&nbsp, stimulus bazooka“, said economist Stephen Innes at SPI Asset Management. ” Instead, it was more of a pop gun”.

Innes added that” Beijing’s reluctance to roll out a bigger package is seriously questioned about the viability of this rally” in stocks.

James Sullivan, head of Asia-Pacific equity research at JPMorgan, told CNBC that” the million-dollar question in China right now is, does the stimulus only flow into the supply side of the equation, or does it ultimately flow through into consumer demand? That’s not our expectation right now”.

Follow William Pesek on X at @WilliamPesek

Continue Reading