The True State of China’s Economy

Published on
27 August, 2018
China, Financial System, Macro
32 minutes
Asset class
Equities, Currencies

The True State of China’s Economy

Featuring Leland Miller

Leland Miller, co-founder of China Beige Book, walks us through his vision of China’s economy. Powered by his firm’s proprietary data gathering and analysis, Miller explores the big picture in China, including his prediction of a slowdown in economic activity. At the same time, he puts this in the context of secular optimism on China’s economic power. Filmed on August 14, 2018 in New York.

Published on
27 August, 2018
China, Financial System, Macro
32 minutes
Asset class
Equities, Currencies


  • AE

    Anders E.

    31 8 2018 04:06

    0       0

    Don't believe bottom up company cash flows give a much better picture as they are driven by debt creation. State owned entities borrow heavily to pay for government supported (local) projects. This generates company cash flows, which thus suffers form the continued debt creation issue and says little about sustainability. Ultimately, the debt issue will be a big temporary headwind, but the Belt and Road initiative is a much bigger deal and will be so for years to come, mitigating the consequence of the current debt issues. Something the rest of the world (excl. directly impacted countries) will not have to help it deal with its debt issues. So, not sure what is meant by "the end game". China is just getting started, though will have booms and busts along the way. The bigger issue is the west's push-back to the integration with Russia, India, Turkey, Syria, and Iran to enable the full potential of the Belt and Road's integration into the European economy. Then of course, there is the China investments into Africa. The only place where the population is growing. China's Great Wall of Debt is a good read and provides perspective into just how opaque the economy really is.

  • FM

    Floyd M.

    30 8 2018 18:13

    0       0

    Uhg rutsill l

  • JS

    Jason S.

    30 8 2018 11:27

    0       0

    Awesome, this interview makes me remember Martin Armstrong's economic cycle. I believe the turning point 2015.75 was the peak in China's economy. Commodities peaked in 2012/13 but there were still a number of infrastructure projects that continued into 2015.75. MA says that 2015.75 was the peak in confidence in government. Perhaps. But, maybe it was the peak in China? Interesting that the stock market peaked in June 2015 - three months before Armstrong's economic confidence cycle. Maybe we see China and its stock market bottom in 2020? A lot of the fundamentals (i.e. the excellent preso above by Leland Miller from China Beige Book) point to this happening. Feliex Zuluaf also talked about China's economy heading down into 2020/21 for a few reasons, which make sense. Indeed, a lot of this is starting to make sense...commodities seem extremely weak at this stage.

  • AA

    Ateet A.

    29 8 2018 01:29

    7       0

    Please have Mr. Miller on again

  • AM

    Andrew M.

    28 8 2018 08:31

    5       0

    Great presentation. Perhaps you can get Diana Choyleva to elaborate on some of these points, and talk about why she thinks the US and China are destined for a protracted trade war/clash over the next few years and decades. She is a fantastic China watcher!

  • GM

    Gregor M.

    28 8 2018 08:07

    4       0

    Off topic but been annoying me for a while now. Can we please get a volume control on each video? Very impractical (and poorly designed) to control with the general volume button.

  • JL

    John L.

    28 8 2018 06:25

    0       1

    While I respect his right to his opinion, I couldn't disagree more. In particular, about the benignity of BRI.

  • CD

    Charles D.

    28 8 2018 01:58

    3       0 interviewer...just the stumbling around..An organized mind.

  • GS

    Gordon S.

    27 8 2018 23:56

    1       0

    Meanwhile on FinTwit, everyone is talking about Alibaba and this blog: (h/t in particular to Josh Wolfe). I haven't gone to the bottom of it yet, but it sure looks like a very interesting source. Reminds me of the good old days, when ZH went through all the footnotes in derivative prospectuses. The yuan may be managed, but when a $500 billion Alibaba trades on the NYSE, it sure looks like a good proxy to trade. Time will tell!

  • SP

    Steve P.

    27 8 2018 23:22

    6       0

    Very interesting conversation.
    One has to wonder whether the Chinese leadership may actually pay attention to Beige book numbers as a way to know what is really going on in their own economy - that's why they allow outside collation to occur.Chinese leadership may accept the fact that if some of their data are massaged for internal/external appearance, then it's possible that most of their data is made up by regional management keen to toe the line. Therefore, Chinese leaders have no real idea of what is happening in their own economy. Beige Book to the rescue - just summizing!!
    Great episode RV - well done.

  • PW

    Phil W.

    27 8 2018 22:51

    4       0

    China awash in debt! So is the rest of the world!

  • DC

    D C.

    27 8 2018 22:00

    5       2

    Also...why you are able to do what you are doing is because you are sitting in New York as an American citizen. It's not like you are going on Chinese state media as a Chinese citizen.

  • F

    Floyd .

    27 8 2018 21:36

    0       0

    interesting perspective however without knowing how his survey process works not sure how credible the information is or better than the guessing he is so critical of. If he is surveying state owned businesses/organizations or controlled by same, not sure how "independent" his process is. Enough with criticizing the music,one I like it,two if its too loud,turn it down or mute! RELAX!

  • DC

    D C.

    27 8 2018 20:53

    6       2

    Much like we have to be vigilante about China's numbers, we must be with RealV intro music. Just when we thought we had bad music inflation under control, it rears its ugly head again in this video. #DJRealVSucks

  • DR

    David R.

    27 8 2018 18:16

    13       1

    Asian based western expat here. Watched it twice. His work is legendary and invaluable. He doesn't do market calls per se, but his organization is highly useful for anyone who works in markets. Monitor his work rather than some of your big name "star" managers who I won't name but clueless about Asia and have been wrong for many years, repeatedly. Thank you Mr Miller, I tip my hat to you. Great job RV to produce this.

  • ss

    sid s.

    27 8 2018 17:22

    3       29

    just wasted half hour watching this guy puke.

  • AA

    Aymman A.

    27 8 2018 15:55

    0       0


  • ZH

    Zayd H.

    27 8 2018 15:51

    15       0

    Biggest takeaway from this interview was a really thoughtful insight: "GDP is a made up concept. GDP doesn't measure productive activity. If you want to have higher GDP you just build a bridge, you tear it down...Never been a good way to understand if China is using capital productively." Very interesting lens not just for China.

    TY, LM.

  • HJ

    Harry J.

    27 8 2018 15:36

    3       0

    Sell that book!

  • MC

    Matthew C.

    27 8 2018 15:00

    4       0

    Can anyone direct me to detailed analysis of what happens if usd/cny passes 7 ? I have been hearing the whole devaluation is bad narrative for the past couple of years, but exactly how that is expected to look across the global financial markets seems to get blurred.

  • MB

    Matthias B.

    27 8 2018 14:57

    4       0

    refreshing. interesting thinking. good value.

  • DR

    David R.

    27 8 2018 14:02

    5       6

    Good show. Gutsy call made right on the day of the nadir of the US/Dollar's bear market rally (and indeed since Aug.15 the dollar has massively collapsed and is headed way more down even more from here). Followers or subscribers of Martin Armstrong will note Mr Miller's secular outlook for China matches that of Armstrong per his new in-depth report last week explaining how, why and when China will become the unchallenged financial capital of the world with the globe's dominant economy & military. By 2032 at latest, just 13 years or so away.

  • NG

    Nick G.

    27 8 2018 10:15

    0       0

    Excellent, thank you!