Ominous Clouds Forming in Chinese Data

Published on
October 1st, 2019
Duration
29 minutes


Ominous Clouds Forming in Chinese Data

The Expert View ·
Featuring Leland Miller

Published on: October 1st, 2019 • Duration: 29 minutes

China's recent economic numbers are the second worst in its history?! Leland Miller, CEO of China Beige Book, argues this using his firm's proprietary data from the third quarter of 2019. He breaks down the discrepancies between the data his firm has collected and the official narrative espoused by the Chinese authorities. Miller shares his prediction for the maximum upside and downside scenarios for the Chinese economy over the next decade. Filmed on September 26, 2019 in New York.

Comments

Transcript

  • EL
    Eric L.
    10 October 2019 @ 01:50
    I agree on the general theme that China is in trouble and the economy is slowing down significantly. However, there are 2 key points that I want to highlight here - (1) The presenter claims that China has an opaque system and most of the data presented may not be accurate (I agree on that). However, my question is - What gives China Beige Book the unique advantage of acquiring highly accurate data in China ? I agree on the methodology in compiling and analyzing the data, but what it claims here is as if there is a "POS machine" installed at these China companies in collecting all these massive data ? (2) I agree on the massive credits given to sustain the companies and the enterprises in China - But how is it different from Fed injecting massive liquidity into the banking system in 2008/2009 with QE ? Likewise for ECB or Bank of Japan ? Anyone who is faced with that level of pressure would have done something - And it comes down to - whether you keep this as a norm or you cut it off gradually and let market forces to take control and weed out the weaker players who should not be sucking up good capital.
  • MF
    M F.
    6 October 2019 @ 14:55
    Good interview. Helpful, as usual. The content was good and I even liked the fact there was no interviewer...just a list of discussion questions. Too often the interviewer doesn't let the interviewee talk, but this was very much substantive content from the speaker exclusively. One small point, I could do without the edgy screen transition between scenes that looks like my computer screen has just frozen or gone haywire for a few seconds..just unnecessarily artsy and somewhat annoying. May even be bad for viewers with epilespsy.
  • GB
    Gift B.
    5 October 2019 @ 04:27
    From what I gather Leland is saying the white house including the USTR would like to peel back the tariffs to the $250 billion level and coast through the election. Where's the source of this information? Can't seem to find elsewhere. Anyone?
    • GB
      Gift B.
      5 October 2019 @ 05:41
      World steel markets had a dramatic turn for the worse since the Aug 1st tariffs announcement. Confidence shattered. Steels prices crashed. This does feel a lot like 2015, except that this time China seems determined to reign in the housing bubble, not least because high household debt is choking consumption. Fiscal and monetary measures, including a 2 trillion RMB tax cuts in March and further cuts to the reserve requirements and lowering LPR in Sept, have failed to stem the slide. If loose credit is not working, what can China deploy in Q4 other than a currency deval to boost exports and dollar earnings? I just don't see it. Engineer an oil collapse to reduce import purchases and thereby maintain a positive balance of trade?
  • BL
    Bart L.
    4 October 2019 @ 09:57
    37% of Australian exports go to China, think we may be in trouble if they continue to slow......... not in doubt
    • LM
      Lee M.
      6 October 2019 @ 09:24
      Exports are not as big a part of the Aus economy as you may think though
  • ly
    lena y.
    3 October 2019 @ 20:17
    I find it odd how we are told the Chinese data not believable but so many try to make sense of it! Sounds like each of them is a specialist of china! China is never transparent! Get over it!
  • B
    Bob .
    3 October 2019 @ 03:37
    Leland Miller always gives a good presentation. Please have him back in 6 months.
  • DR
    David R.
    2 October 2019 @ 19:29
    One-sided and the opposite view of Ray Dalio, founder & CIO of Bridgewater. As you can see on Dalio's website, two of the riskiest positions for the next decade are being too invested in US, and not being invested in China (which in his view is destined to become #1). More details online at his site, with extensive details available to clients. BTW, Ray lived in China and his son was educated there, so he knows a thing or two about China, besides being a bonafide investment guru. Just sayin.
    • CS
      Colin S.
      2 October 2019 @ 20:39
      listen to Kyle Bass - listen to Steve Bannon - Kyle Bass' interview of famous Chinese entrepreneur Guo Wengui - if Dalio is a fan of China - with all that is China - he is then long-term your enemy and this country's enemy.
    • DR
      David R.
      3 October 2019 @ 00:17
      Hi Colin, Dalio's is an investment thesis rather than a political judgement. This is about finance and making money. For example, you might dislike Microsoft (I sure do) but I can't argue about its enormous success and riches that it has created for many. This is about finance and making money. I wouldn't let Bass manage a nickel of money, he has failed so often at it. His investment in nickels, literally, being just one of his legendary screw-ups. Having failed at his craft, he's apparently become a tool of the MIC & deep state, while Dalio has become the world's biggest & most successful HF manager and last year reported the highest income of any American. I find the Beige Book report interesting and unsure what to make of it; I note there's some significant discrepancies - but also some similarities - between it and the comprehensive HSBC data. According to Dalio, China will be just fine in the long run, more than just fine, it'll become #1 in practically everything eventually and it's nothing to fret about as it was #1 before for 2000 years tho not imperialistic. Hat tip to Princeton Economics & Martin Armstrong too for concluding same. Make money, not war.
    • WM
      Will M.
      6 October 2019 @ 18:30
      I agree with you David (and Martin Armstrong) that China is likely going to supplant the US as the worlds economic and financial engine. The problem is of course, what will that look like? The second problem is will the US back down or will it use its military might to force a stand off. Thirdly, if China suffers a set back no one will be surprised but once they get really going and all those Chinese decide they want a western style standard of living, then what will happen to natural resources......... Great opportunity for making money, however the planet may have a real issue with the extra demand.
  • WC
    Wilson C.
    2 October 2019 @ 03:46
    Always good to hear from Leland, very connected to what's happening in China. I didn't find it negative at all, realistic assessment based on available data and his opinion on how it can play out. Take-away is China growth has to slow < 5% Y/Y, collateral impacts to trading countries and could end badly if mis-manage or not. Thanks RV
    • MS
      Malcolm S.
      2 October 2019 @ 05:02
      if China slows or collapses, so will the rest of the global economy
  • AC
    Andrew C.
    2 October 2019 @ 03:00
    From the transcript They push a rebalancing into the services economy, they stop the transition from happening out of commodities and property. You've got to allow layoffs, you've got to allow defaults, you've got to allow trust products to go belly up and companies to go belly up. You've got to eliminate the zombie economy aspects that you're seeing too much of now, this desire for the government not to let anyone fail ever. Not sure this is “failure” option is really possible for a Communist Country? So that leaves the second more dire alternative. Or a third? Roll out the pure capitalist society?
  • JE
    James E.
    1 October 2019 @ 21:09
    Very negative. The narrative from RV seems to lead too much towards doom and gloom. Positivity is some interviews would be nice.
    • MB
      Michael B.
      1 October 2019 @ 21:35
      Agreed. Let’s get somebody on who can put some lipstick on the Chinese pig! Assuming the pig isn’t quarantined.
    • RM
      Ryan M.
      1 October 2019 @ 22:59
      Response of the year! LOL
    • WM
      Will M.
      6 October 2019 @ 18:21
      I am hear to listen to the facts and if the facts don't clearly reflect the impending doom that indeed awaits us sooner or later then I wouldn't be here in the first place. What is it you don't see about the world today....?
  • MP
    Maxim P.
    1 October 2019 @ 16:05
    Great interview as always, lots of good insight! Just wanted to point out that the bank / non bank lending chart labels seem to be wrong. I think the pink bar (highest in Q2 and Q3 2019) are non bank shadow lending, not bank lending as in the video. Cheers! I’d be curious to know what’s inside the Commodities sector bucket and how granular the data is. I am pretty sure that data is almost impossible to get on a consistent and accurate basis.
  • SS
    Sam S.
    1 October 2019 @ 14:34
    Hey Leland, Well spoken and most educational. How about what's happening in Hong Kong? What's the real agenda of Bejing? South China Sea, blocking of US Navy, as it all seems like a land and sea take over. Your thoughts please.
    • WC
      Wilson C.
      2 October 2019 @ 03:27
      George Friedman has written about the geography of China and how critical it is (for China) to be able to have control over it's maritime trade routes. Google it for another perspective vs the taking over the world thesis.
  • GH
    Gary H.
    1 October 2019 @ 13:54
    Excellent content. Please have back quarterly for an update
  • Nv
    Nick v.
    1 October 2019 @ 13:05
    40% of Australian exports are iron ore and coal = highly exposed
    • SS
      Shanthi S.
      5 October 2019 @ 03:25
      Gulp.
  • IH
    Iain H.
    1 October 2019 @ 12:50
    I liked this interview. Another piece in the puzzle for me.
  • jc
    james c.
    1 October 2019 @ 12:30
    It is interesting there was not one mention of the impact of swine flu on pork supply/ prices. I understand this could have a +\- 5yr impact on supply, which surely must have a short and medium term impact on prices /inflation and citizenry?
    • TN
      Tyler N. | Real Vision
      1 October 2019 @ 12:31
      Tony Nash may be talking about this later in the week;)
  • TS
    Taranvir S.
    1 October 2019 @ 11:06
    All of us can guess and make estimates for Chinese data. Yet, CCP will surprise you with official data at any instance in the future
  • CD
    Christine D.
    1 October 2019 @ 10:41
    Super one sided
  • SG
    Sven G.
    1 October 2019 @ 09:25
    interesting content. nice to see that the questions are now narrated :D
  • OD
    Orin D.
    1 October 2019 @ 08:29
    I'm on a paid membership and am hearing ads at the end of every video. unacceptable
    • BR
      Ben R.
      1 October 2019 @ 10:09
      Let’s play a game! I’m going to read out three sentences, and you have to guess what they have in common. Here we go. “This has literally changed my life! I am currently so pissed off about ads I burned down my entire house!🔥” Power pause for dramatic effect👌😉 “This ad has been absolutely spot on I am currently 30% more ready to click the link but will it make the ads stop ? “ Pause again. “This is effectively a macro microphone from two of the best for an up sell” Give up? These are the inner voices of our paid subscribers. I think a banner would be good at the bottom of the comments section as an alternative. Your videos would be better without the sell pollution.
    • MS
      Marc S.
      1 October 2019 @ 12:33
      I can’t believe this .. we re are all on a 50 cent per day subscription. So you paid 50 cents to listen to this. And yet there are comments as soon as a guest speaks about his firm, fund, etc. RV is a win win for all involved.
    • MS
      Marc S.
      1 October 2019 @ 12:59
      Ignore earlier comment. Misunderstood. But doesn’t change the fact that for 50 cents a day we can bear with a little ad ;)
    • CL
      Cyril L.
      1 October 2019 @ 17:35
      You know you don't have to listen to the ad if you don't want to, right?
    • GF
      Gordon F.
      2 October 2019 @ 03:48
      The first dozen times or so it came up, I felt as you did, but now I realize that it is my cue to hit "Pause", which ends the ad, and also keeps the video from rolling over to some other video I have already seen, and which also annoys me. So now, when I hear, "Let's play a game," I reflexively hit the pause button, which then gives me time to consider if I have a comment worth making on what I have just seen. Or at least I can peruse the comments in peace.
    • dm
      david m.
      2 October 2019 @ 15:12
      Its a little more clever than that. The folks that are being interviewed are....
    • PP
      Patrick P.
      3 October 2019 @ 12:04
      If you don't want to listen to the ad ... press the mute button and let the video continue while you read these comments....WHALA !
    • WM
      Will M.
      6 October 2019 @ 18:41
      For HEAVEN's SAKE people, just hit the pause or finish buttoned don't listen to the ad. I don't like them either but after the first 3 or 4 pauses I now do it automatically.
  • BH
    Bin H.
    1 October 2019 @ 07:20
    The question still is what China would get to claim some sort of victory to its people if a trade deal is to be signed