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The Apple-focus is indicative of a wider trend - viewing China and its economy through a Western lens - even seeing what we want to see. The CCP is going nowher

The Apple-focus is indicative of a wider trend - viewing China and its economy through a Western lens - even seeing what we want to see. The CCP is going nowhere, the market while having taken a recent hit, is in no way about to collapse. > There are people with entire savings lost in real estate and small business. It's a very volatile situation. The same could be said of NYC or Switzerland in the previous couple of years too.

whendoyoushrink 4y ago
Can you clarify what is "the market"? The stock market? The economy?
marianatom 4y ago
Export is 20% of China's economy, real estate is another 20-30% of China's economy. That's 50% of the total economy. Based on on the ground estimate (short sale/foreclosure by the court figures), real estate price has collapsed 50%. Based on Hong Kong numbers, export has collapsed 40%. The vicious cycle of collapsing demand -> job losses -> weakening spending -> investments pulling out -> collapsing demand will see no end.
tenpies 4y ago
The mind-boggling side for me is that the West is obsessed with Apple leaving China, but never bothers to check where all the EV manufacturers are. Even Tesla, without the Shanghai factory, would probably be doomed. If I had to put money on which EV company becomes the next major car company of the world, I would almost certainly bet that it's going to be a Chinese one. So sure, while a stagnant industry that is no longer growing may leave and that sucks, but the next huge growth industry is firmly entrenched in China and dependent on Chinese companies. Tales of China's demise are grossly exaggerated.
- marianatom 4y ago
  Tesla is building its next major factory in Mexico https://www.cnn.com/2023/03/01/business/tesla-mexico-plant/index.html https://www.cnn.com/2023/03/01/business/tesla-mexico-plant/i..., that's how much Elon believes in China. > If I had to put money on which EV company becomes the next major car company of the world, I would almost certainly bet that it's going to be a Chinese one. Do you mean WM motor? one of the most promising startup https://www.autonews.com/china/wm-motor-pay-cuts-layoffs-signal-ev-market-under-stress https://www.autonews.com/china/wm-motor-pay-cuts-layoffs-sig... where at least 20 percent of WM Motor’s workforce has been laid off since November? or Didi/Li auto venture? https://www.reuters.com/business/autos-transportation/chinas-didi-ev-joint-venture-with-li-auto-applies-bankruptcy-court-2022-08-11/ https://www.reuters.com/business/autos-transportation/chinas... which declared bankruptcy? or Nio, whose stock was as high as $62, now below $10? or BYD, whose stock has been offloaded by Warren Buffet by 1/3 since august of last year? or China's car industry as a whole https://www.marklines.com/en/statistics/flash_sales/automotive-sales-in-china-by-month https://www.marklines.com/en/statistics/flash_sales/automoti..., whose production dropped 35% and sales dropped 34% in January 2023? And why would a Chinese car company not be sanctioned/outlawed relating to the CHIP act, or something similar out of Europe?
  - hnfong 4y ago
    I know nothing about EVs so I wouldn't be able to tell whether you're right or not, but > or BYD, whose stock has been offloaded by Warren Buffet by 1/3 since august of last year? Arguing that a company would fail because Warren Buffet no longer holds their stock seems a bit weak. Berkshire Hathaway doesn't hold a lot of stocks, but you wouldn't say most public companies are doomed to fail. And Berkshire doesn't hold any Telsa stock either. In any case you might want to revisit your assumptions: https://www.cnbc.com/2023/02/15/charlie-munger-says-byd-is-far-ahead-of-tesla-in-china.html https://www.cnbc.com/2023/02/15/charlie-munger-says-byd-is-f...
  - comte7092 4y ago
    Tesla building in Mexico has a lot more to do with the EV subsidy requirements from the IRA than it has to do with China.
- seanmcdirmid 4y ago
  > Even Tesla, without the Shanghai factory, would probably be doomed. That makes no sense whatsoever: all the Teslas (Model 3/Y) produced in the Shanghai plant are meant to be sold in China. Without the Shanghai factory, Tesla wouldn't have much of a Chinese business, BUT it wouldn't affect at all its production capacity for the rest of the world. The only EVs made in China that are being sold in the USA ATM are the Volvo/Polestar EVs made in Luqiao. There is a huge tax on that (into the USA from China, likewise for cars coming into China from the USA), even BYD opened a factory in california to get around that for their EV bus production (and Tesla's Shanghai plant exists for preferential tax treatment in China, which is a no brainer business move).
  - slaw 4y ago
    Only 60% of Chinese made Teslas are sold in China. https://insideevs.com/news/630002/china-tesla-ev-sales-december2022/ https://insideevs.com/news/630002/china-tesla-ev-sales-decem...

whendoyoushrink 4y ago

Can you clarify what is "the market"? The stock market? The economy?

marianatom 4y ago

Export is 20% of China's economy, real estate is another 20-30% of China's economy. That's 50% of the total economy. Based on on the ground estimate (short sale/foreclosure by the court figures), real estate price has collapsed 50%. Based on Hong Kong numbers, export has collapsed 40%. The vicious cycle of collapsing demand -> job losses -> weakening spending -> investments pulling out -> collapsing demand will see no end.

tenpies 4y ago

The mind-boggling side for me is that the West is obsessed with Apple leaving China, but never bothers to check where all the EV manufacturers are. Even Tesla, without the Shanghai factory, would probably be doomed. If I had to put money on which EV company becomes the next major car company of the world, I would almost certainly bet that it's going to be a Chinese one. So sure, while a stagnant industry that is no longer growing may leave and that sucks, but the next huge growth industry is firmly entrenched in China and dependent on Chinese companies. Tales of China's demise are grossly exaggerated.

marianatom 4y ago
Tesla is building its next major factory in Mexico https://www.cnn.com/2023/03/01/business/tesla-mexico-plant/index.html https://www.cnn.com/2023/03/01/business/tesla-mexico-plant/i..., that's how much Elon believes in China. > If I had to put money on which EV company becomes the next major car company of the world, I would almost certainly bet that it's going to be a Chinese one. Do you mean WM motor? one of the most promising startup https://www.autonews.com/china/wm-motor-pay-cuts-layoffs-signal-ev-market-under-stress https://www.autonews.com/china/wm-motor-pay-cuts-layoffs-sig... where at least 20 percent of WM Motor’s workforce has been laid off since November? or Didi/Li auto venture? https://www.reuters.com/business/autos-transportation/chinas-didi-ev-joint-venture-with-li-auto-applies-bankruptcy-court-2022-08-11/ https://www.reuters.com/business/autos-transportation/chinas... which declared bankruptcy? or Nio, whose stock was as high as $62, now below $10? or BYD, whose stock has been offloaded by Warren Buffet by 1/3 since august of last year? or China's car industry as a whole https://www.marklines.com/en/statistics/flash_sales/automotive-sales-in-china-by-month https://www.marklines.com/en/statistics/flash_sales/automoti..., whose production dropped 35% and sales dropped 34% in January 2023? And why would a Chinese car company not be sanctioned/outlawed relating to the CHIP act, or something similar out of Europe?
- hnfong 4y ago
  I know nothing about EVs so I wouldn't be able to tell whether you're right or not, but > or BYD, whose stock has been offloaded by Warren Buffet by 1/3 since august of last year? Arguing that a company would fail because Warren Buffet no longer holds their stock seems a bit weak. Berkshire Hathaway doesn't hold a lot of stocks, but you wouldn't say most public companies are doomed to fail. And Berkshire doesn't hold any Telsa stock either. In any case you might want to revisit your assumptions: https://www.cnbc.com/2023/02/15/charlie-munger-says-byd-is-far-ahead-of-tesla-in-china.html https://www.cnbc.com/2023/02/15/charlie-munger-says-byd-is-f...
- comte7092 4y ago
  Tesla building in Mexico has a lot more to do with the EV subsidy requirements from the IRA than it has to do with China.
seanmcdirmid 4y ago
> Even Tesla, without the Shanghai factory, would probably be doomed. That makes no sense whatsoever: all the Teslas (Model 3/Y) produced in the Shanghai plant are meant to be sold in China. Without the Shanghai factory, Tesla wouldn't have much of a Chinese business, BUT it wouldn't affect at all its production capacity for the rest of the world. The only EVs made in China that are being sold in the USA ATM are the Volvo/Polestar EVs made in Luqiao. There is a huge tax on that (into the USA from China, likewise for cars coming into China from the USA), even BYD opened a factory in california to get around that for their EV bus production (and Tesla's Shanghai plant exists for preferential tax treatment in China, which is a no brainer business move).
- slaw 4y ago
  Only 60% of Chinese made Teslas are sold in China. https://insideevs.com/news/630002/china-tesla-ev-sales-december2022/ https://insideevs.com/news/630002/china-tesla-ev-sales-decem...