Chinese New Year ushers in the year of the Rat. But the Coronavirus is going to have an impact on China’s celebrations and world markets near term. Lunar New Year is a significant travel period for 400m Chinese, raising the potential for further spread of the illness. The outbreak of Coronavirus in China has led…
Weekly wrap from Pythagoras Investing
Where economic rationality is expected and not delivered it leads to investment mistakes. This is a key area maths has a role to play – seeing through the noise and getting to the heart of the share price behaviour. Chinas aims are not the same as a Western paradigm. Innovation will bring great change to the captains of industry.
Western commentators and analysts find China troublesome to fathom. This is due to the ‘free market’ prism through which they look through. It is a fundamentally flawed starting position when trying to understand China! This further complicates dealing with China in a Trade War. Cultural Divide There is a Cultural Chasm which is impossible for…
We highlight the parallels of the China-US and Japan-US trade wars. None of this is new and there is a long way to travel yet. Firstly, let’s start in the mid 80s. New York Times, 11 March 1985, page 1 headline “JAPAN INVESTS HUGE SUMS ABROAD, MUCH OF IT IN U.S. TREASURY BONDS”. An enormous…
Where economic rationality is expected and not delivered due to the east v west cultural divide it leads to investment mistakes. This is a key area maths has a role to play – seeing through the noise and getting to the heart of the share price behaviour.
The US backtracked from the recent Trump “tariff tweets” due to be implemented on September 1. Essentially, Trump admitted that U.S. consumers were bearing the brunt of the impact and decided to delay tariffs, recognizing the negative impact further tariffs would have on the U.S. economy. He has lacked the understanding of the effect of…
China played the currency devaluation card letting its currency slide in value against the dollar, making its goods cheaper abroad and offsetting American tariffs. Its unsurprising that the Chinese are using the currency as a weapon – it has been a mainstay in their armoury. The devaluation of the managed renminbit will absorb the impact…
In light of the proposed trade sanctions proposed on our region, we wanted to pose the questions, where does Australia tie itself? Where should it? As we recently wrote about in our blog on the North Korean Missile Crisis there is significant influence possible by President Putin over North Korea’s Supreme Leader. Putin characteristically takes…
Whilst it appears through cultural and trade links that the person most able to influence North Korea’s Supreme Leader is the President of China, in reality Xi Jinping is not the only one nor is he the main one. The one who Kim Jong Un tries to copy the most is the President of Russia,…
To have any hope of getting your head around China its important to understand China’s motivation. In our view their drivers are to industrialise, create employment and sufficient infrastructure to create a sustainable economy for the long term. The difficulty for China is that to industrialise it requires 20-40% of worlds natural resources, EVERY year.…
Cultural Chasm in the Understanding China Series Western commentators and analysts find China troublesome to fathom. This is due to the ‘free market’ prism through which they look at the share market. It is a fundamentally flawed starting position when trying to understand China! Cultural Chasm There is a Cultural Chasm which is impossible for…
Part of the Understanding China Series China’s 5 Year Plan To understand China it’s important to understand the 5 year plan. In China the major players do the work of the government due to what is incentivised. Local officials, banks and big companies, both state-owned and private—change their strategies to be in line with the…
Part of the Understanding China Series Forward Planning – China’s 5 year Plan Chinas five-year plans are the closest thing to an election manifesto for the Communist Party, laying out its longer-term priorities. But since the party still has overwhelming power, the plans carry real weight and China has a way of following through on…
Australias International Alliances in the Understanding China series, 6 October 2015 In light of the free trade agreements recently published, we wanted to pose the questions, where does Australia tie itself? Where should it? Clearly we need to examine the USA and China – as we have a foot in 2 camps. But what about…