Mittwoch, 4. März 2009

China's economy

Talked to an ex-colleague who is managing a China-themed mutual fund. He says that from talking to the owners of various HK-companies he's invested in, people that run Guangdong factories, he gets the sense that the massive destocking taking place all along the global supply chain is beginning to reach its natural limit: Pretty soon, orders for all sorts of things will have to go up, because stocks have run down to unsustainably low levels. And apparently, several companies told him they are already seeing rising sales, because their Japanese competitors have priced themselves out of the market due to the rising Yen.

I asked him about the real estate glut, and he said that the real estate companies he's invested in have few vacancies. The developers that are suffering are mostly those that don't know what they are doing. Me-too-investors, people that got rich in other industries and decided to join the real estate game in a big way. Don't know what to make of that: The oversupply is there. It doesn't help the economy that "solid developers" are doing better than others. As long as there's massive oversupply, there won't be much new real estate development, so the construction industry will remain anemic. Unless the government decides to build even more highways, airports, and subway lines.

Oh, and the FTD just reported that the Chinese purchasing manager index has improved sharply, as more and more local companies are reporting increases in orders and production (not sure to what extent the purchasing manager index is subject to government meddling - I assume it is published by official channels).

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