4 ms·

Chinese stocks don’t seem to follow any reality either. BYD is basically flat over 5 years.

Tiktaalik 10mo ago
The explanation that I'm finding more and more compelling is that this is because there's actual competition in China, whereas in the west conglomerates have been able to carve up the market into fiefdoms and feast, with increasing amounts of cash that they can funnel into dividends and buybacks. From the NA vehicle POV it doesn't look healthy. Stocks of the major auto makers have done well this year, while product gets more and more expensive and limited. Barely seems possible to buy anything but a F150like anymore.
- thesmtsolver2 10mo ago
  Outside of EVs and more broadly China rates near the bottom for market freedom https://gfmag.com/data/economic-freedom-by-country/ https://gfmag.com/data/economic-freedom-by-country/ If the broader market is rigged, investors don’t rush in for just one segment.
  - bparsons 10mo ago
    Interesting definition of freedom. The top three countries happen to be the places most permissive to international tax dodgers.
    - Sayrus 10mo ago
      > produced by the Heritage Foundation > Twelve are the factors related to four key aspects of the economic environment that are graded from 0 to 100 and averaged to determine a country’s score: rule of law (and related sub-categories: property rights, government integrity, judicial effectiveness); government size (government spending, tax burden, fiscal health); regulatory efficiency (business, labor and monetary freedom); open markets (trade, investment and financial freedom). Quite the definition they made up.
      - atvrager 10mo ago
        > produced by the Heritage Foundation why bother to read past that? save yourself some time.
    - eru 10mo ago
      What do you mean by tax dodgers? The US allows much more tax dodging than Singapore, for example. Try not paying your taxes or violating any other law in Singapore any time, if you want to find out.
      - bparsons 10mo ago
        The US isn't exactly known as a model of good governance either.
  - deleted 10mo ago
    [deleted]
  - culi 10mo ago
    It's not so much that the broader market is rigged. It's that every major industrial hub funds its own player: BYD (Shenzhen), NIO (Hefei), GAC Aion (Guangzhou), SAIC (Shanghai), etc. It might seem "rigged" to a westerner because it's so subsidized but China has a LOT of industrial hubs and therefore a lot of competition. The US also heavily subsidizes EVs but the subsidies mostly only go to one company. Just take a look at the mind-boggling amount of subsidies we've given to Tesla both federally and on a state-by-state basis. Nevada's almost 2$ billion being the most blatant https://subsidytracker.goodjobsfirst.org/parent/tesla-inc https://subsidytracker.goodjobsfirst.org/parent/tesla-inc
- phatfish 10mo ago
  Western corporations optimise for share price. The way to do that is by pulling strings at the government level to block your competitors and by getting nice tax breaks; not by having the best product for the consumer. China and Chinese companies still want to shake off the "China means bad quality" image, so they actually want to make a great product at a good price for the consumer. To-the-moon share price growth doesn't happen by giving your customers a good deal. Also the CCP doesn't want corporations forgetting who calls the shots, so there is some internal pressure keeping things less "frothy" than Western markets (where most governments are running scared of the big global corps).
bparsons 10mo ago
Chinese companies are optimized to grow and build stuff. US companies are optimized to deliver returns to shareholders.
- bobthepanda 10mo ago
  Chinese stocks have historically done poorly due to poor governance and auditing failures.
bobthepanda 10mo ago
You could say that about the Chinese stock market in general. Neither the SSE Composite nor the Hang Seng correlate all that well with Chinese GDP growth.
DecoPerson 10mo ago
I know little about stocks, but I've heard China doesn't allow shorting stocks and many other "advanced" stock products/instruments. You can buy, sell and trade stocks, and nothing else. They also audit to ensure stocks are not oversold/traded (e.g.: selling stock you don’t own in the hopes you’ll obtain some in time to fulfil an order). Maybe that's why they behave differently?

The explanation that I'm finding more and more compelling is that this is because there's actual competition in China, whereas in the west conglomerates have been able to carve up the market into fiefdoms and feast, with increasing amounts of cash that they can funnel into dividends and buybacks. From the NA vehicle POV it doesn't look healthy. Stocks of the major auto makers have done well this year, while product gets more and more expensive and limited. Barely seems possible to buy anything but a F150like anymore.

thesmtsolver2 10mo ago
Outside of EVs and more broadly China rates near the bottom for market freedom https://gfmag.com/data/economic-freedom-by-country/ https://gfmag.com/data/economic-freedom-by-country/ If the broader market is rigged, investors don’t rush in for just one segment.
- bparsons 10mo ago
  Interesting definition of freedom. The top three countries happen to be the places most permissive to international tax dodgers.
  - Sayrus 10mo ago
    > produced by the Heritage Foundation > Twelve are the factors related to four key aspects of the economic environment that are graded from 0 to 100 and averaged to determine a country’s score: rule of law (and related sub-categories: property rights, government integrity, judicial effectiveness); government size (government spending, tax burden, fiscal health); regulatory efficiency (business, labor and monetary freedom); open markets (trade, investment and financial freedom). Quite the definition they made up.
    - atvrager 10mo ago
      > produced by the Heritage Foundation why bother to read past that? save yourself some time.
  - eru 10mo ago
    What do you mean by tax dodgers? The US allows much more tax dodging than Singapore, for example. Try not paying your taxes or violating any other law in Singapore any time, if you want to find out.
    - bparsons 10mo ago
      The US isn't exactly known as a model of good governance either.
- deleted 10mo ago
  [deleted]
- culi 10mo ago
  It's not so much that the broader market is rigged. It's that every major industrial hub funds its own player: BYD (Shenzhen), NIO (Hefei), GAC Aion (Guangzhou), SAIC (Shanghai), etc. It might seem "rigged" to a westerner because it's so subsidized but China has a LOT of industrial hubs and therefore a lot of competition. The US also heavily subsidizes EVs but the subsidies mostly only go to one company. Just take a look at the mind-boggling amount of subsidies we've given to Tesla both federally and on a state-by-state basis. Nevada's almost 2$ billion being the most blatant https://subsidytracker.goodjobsfirst.org/parent/tesla-inc https://subsidytracker.goodjobsfirst.org/parent/tesla-inc
phatfish 10mo ago
Western corporations optimise for share price. The way to do that is by pulling strings at the government level to block your competitors and by getting nice tax breaks; not by having the best product for the consumer. China and Chinese companies still want to shake off the "China means bad quality" image, so they actually want to make a great product at a good price for the consumer. To-the-moon share price growth doesn't happen by giving your customers a good deal. Also the CCP doesn't want corporations forgetting who calls the shots, so there is some internal pressure keeping things less "frothy" than Western markets (where most governments are running scared of the big global corps).

bparsons 10mo ago

Chinese companies are optimized to grow and build stuff. US companies are optimized to deliver returns to shareholders.

bobthepanda 10mo ago
Chinese stocks have historically done poorly due to poor governance and auditing failures.

bobthepanda 10mo ago

You could say that about the Chinese stock market in general. Neither the SSE Composite nor the Hang Seng correlate all that well with Chinese GDP growth.

DecoPerson 10mo ago

I know little about stocks, but I've heard China doesn't allow shorting stocks and many other "advanced" stock products/instruments. You can buy, sell and trade stocks, and nothing else. They also audit to ensure stocks are not oversold/traded (e.g.: selling stock you don’t own in the hopes you’ll obtain some in time to fulfil an order). Maybe that's why they behave differently?