Comments by "Peter Jacobsen" (@pjacobsen1000) on "China Update" channel.

  1. 5.5% seems high, but if they're pumping USD 500 billion (being 2.8% of GDP) into the economy, that'll help. However, just the last two months poor home sales alone will result in a drag-down of around 0.45% of GDP.
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  2. My first thought was that this is a place companies can buy and sell the data they've collected, but that seems too unethical, even for China.
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  3. I doubt there's going to be a major and sudden crash. Much more likely is an annual slowing down of growth by 0.3% on average over the next 7-10 years. (Obviously this is a very rough estimate).
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  4. Hah, I was wondering where that was. My guess was north-eastern city, or possibly Hangzhou. Is the church and surrounding buildings original (German)?
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  5.  @in-human1698  "20-30 percent for double patterning on 7nm chips using DUV." Wow, that's very low. So each usable chip increases 4-5 times in cost.
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  6. It's like putting your hand on the stove and realizing it's not nearly as hot as people told you it was going to be.
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  7. I'll try to give an answer. There is no official list of tiered cities, so people will often disagree. -First tier: Beijing, Shanghai, Guangzhou, Shenzhen -Second Tier: Other major cities, especially along the coast: Hangzhou, Suzhou, Nanjing, Ningbo, Xiamen, and some major provincial capitals in the interior -Third tier: Large cities in the interior, including many provincial capitals -Fourth tier: County seats and smaller cities, though in the Chinese context, they may still have a population of 1-4 million. Another way to look at it, used to be popular in the expat community: -First tier: Has tons of international brands and Shake Shack, Burger King, Starbuck's, McD's, KFC -Second tier: Has Starbuck's, McD's, KFC -Third tier: Has McD's, KFC -Fourth tier: Only has KFC
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  8. I guess Q3 GDP numbers will come out next week.
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  9. Companies can't be traitors. They are loyal only to their owners, regardless which country they are based in.
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  10. It was also Bush 2s (Dubya's) choice of pronunciation. It never failed to make me gnash my teeth.
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  11. True, but that is not an indicator of trouble. Many successful economies are net importers of food: Singapore, Iceland, Japan come to mind.
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  12.  @pearlyung  Pork is pretty cheap in China, around $3.5 a pound, some cuts less.
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  13.  @DuxSupremus  "they've completely ruined the habitability of their country through pollution". Certainly China has its fair share of pollution, but not so much that is has a major impact on food production. China's main problem in this area is the shortage of arable land. Large parts of China are mountainous, and the land up there is only just enough to feed the local population. However, it is correct that efficiencies in agriculture are not on par with the west. In a pinch, China could probably feed itself, but it would have to forgo of meat and sustain itself on just grain and vegetables. The vast amount of China's food imports go toward animal feed.
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  14. I believe Tony is based in Ningbo.
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  15. Re.: Shanghai. I received an 'exit pass' today and left my community for the first time in almost two months. Went to a nice supermarket, got some coffee beans, butter, cheese. It was amazing! "Freedom, freedom, freeedom, woooooaaaahhhhh, freedooooooom" (Aretha Franklin)
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  16.  @gtw4546  Haha, perhaps, but there's not much to do outside with all the shops closed.
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  17. China's population will not halve by 2050. That is practically impossible, barring some major natural disaster that kills 500 million in one fell swoop. We can expect that almost everybody under the age of 50 right now will still be alive in 2050, when they will be 78. There are currently about 850 million in China under 50, so even if Chinese women stop giving birth tomorrow and never have another baby, there will still be those 850 million left by 2050. 850 million is 60% of the current total. More likely, from now until 2050, at least 200 million babies will be born, giving a total of 1.05 billion. That's a worst case scenario. My prediction says 1.2 billion in 2050, a prediction based on TFR slowly falling to 0.9 babies/woman, as is the case in S. Korea.
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  18. That's my question, too. You can make 7nm chips on a 28nm machine (which is what they have), but apparently only at around 60% yield, which means 66% higher price per chip, or around $100 higher. Perhaps Huawei is willing to eat that extra cost.
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  19. China has traditionally stayed out of problems concerning other countries, as long as they don't also concern China. It has been like this for over 2000 years. It remains a highly insular culture.
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  20. Olympic arms race: 100 missiles in 9.78 seconds.
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  21. Re. Fewer marriages: We shouldn't forget that one of the reasons for fewer marriages is that there are simply fewer women in the prime wedding age, 23-29. There are only a total of 64 million in that group, or ave. of 8 mill/year. Just 5 years ago, there were an average of 10-11 mill/year.
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  22. 4:50 "60% of people aged 16-24 had no more than a high school education". Ok, but let's remember that people don't graduate high school until they're 18-19 years old, and they don't get a college degree until they're 22-24, so even if everybody ends up getting a college degree you would still only have 67% who have graduated high school and at most 10-20% who have graduated college. So those numbers don't sound that alarming. Edit: Oops, I jumped the gun and didn't hear the next sentence: "Excluding people currently enrolled in school, 70 only have a high school degree". Well, still not such bad numbers as again, within that age cohort, only about 67% are old enough to have graduated high school.
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  23. The water issue? Do you mean the quality of drinking water, or the available water for irrigation and hydro power production?
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  24.  @thomasherrin6798  Well, the drinking water quality is about the same as it has been for years. You shouldn't drink the tap water, but you can shower in it and brush your teeth in it. There are people who drink tap water, but it can have a bad taste. May also be contaminated with heavy metals. As for irrigation, it appears that there are still water shortages in some regions. SCMP just recently posted a video of a farmer whose crops were short of water.
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  25. If you're a foreign invested company and you have proof that you paid all your company taxes, then transferring your profits abroad is not hard. There's paperwork, yes, but no real stumbling blocks.
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  26. Yes, much anticipated good news. It will likely be accompanied by 'no vaccine or testing requirements'. Chinese tour operators and hotel owners are looking forward to this.
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  27. If you've been following this channel for long enough, you will know that Tony is very aware of China's demographic problems. You also seem to be contradicting yourself: You write 'Since their economy is based on export driven growth, and not domestic consumption, there will not be a big enough population to sustain their economy'. If their growth depends on exports, then domestic consumption is less important than production.
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  28. I think the Chinese government and people generally take their cue from the UN climate panel. That is in line with what most countries and people do.
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  29.  @ChinaUpdate  Yes, we shared some great stories: I told them how I once got scammed in the guy's home town Guilin, and the girl told me how she once got scammed in Vienna. Lots of laughs.
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  30.  @naguoning  "Of course in China BYD is slapping VW." Not quite. VW and BYD sales are neck and neck for 2023, with each having sold just about 3 million vehicles, including both EV and gas cars. I live in Shanghai, and we certainly see a lot of Chinese EVs, incl. BYD, but there are also still a lot of the old brands being sold: VW, BMW, Toyota, GM, Hyundai, etc. These are all popular and respected brands in China, and people like to buy them (still). There is no indication that Chinese people have suddenly decided to reject western brands.
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  31.  @Will_Smith_Slapping_Xi_Jinping  It's a think tank that covers global threats, so mostly military/strategic content. They primarily cover Russia/Central Asia, Middle East, China/N. Korea, and terrorism generally.
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  32. Great episode, which brought me to the Sinification Substack. Much reading to be done.
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  33. I think it's a little deceptive of Bloomberg to refer to general budgetary expenditures as 'stimulus'. We don't normally call other countries' government budget 'stimulus', it's just the annual budget. Nevertheless, the remainder, 9 trillion Yuan, or 1.4 trillion USD, is still a very large stimulus at roughly 7.7% of GDP. Without it, would China's GDP for 2022 grow at all?
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  34.  @woohu8443  But what's included in that 30%? Also the annual government budget? I just wouldn't count that.
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  35.  @Leshic2  Thanks for your comment. I am well aware of the numerous solar parks in China's west and north. Yes, they are truly massive! There are also huge wind parks in the northwest, going on along the highway for hours and hours.
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  36. On the face of it, 'New Productive Forces' sounds like automation, robotics, AI, and anything that can increase productivity. It'll be interesting to follow what they come up with.
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  37. My God, it's gloomy!
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  38. Since China no longer publishes any Covid data, we have to resort to speculation: The funeral home person quoted in Tony's video says there's a one-month waitlist to get your loved one's body cremated. We can then guess (and it is only a guess) that this equates to twice the number of cremations they would have in a normal month. Since, in pre-Covid China, about 10.1 million people died in a year (= 840,000/month), we can estimate that in the most recent wave 840,000 excess people have died. At least. Could be more, but probably not less.
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  39. I think it's all of the above. In the end, businesses will go where they can make money. Lots of businesses are quite committed to the Chinese market, especially consumer brands. But those who only/mostly manufacture for export may seek more favorable countries as a base. Generally, low-end manufacturing is leaving / has left. On the other hand, I see more western mid- and upper-market life-style brands coming in. Even if economic growth is flatlining, there will still be some people who might buy your product. That being said, if I were an investor I would go elsewhere unless I were investing in my own business. Much of the low hanging fruit was picked a while ago. India might be the next 'miracle', but it's too early to say.
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  40. Re. Covid deaths: It is always tragic for the nearest when a family member dies, but whether China's Covid deaths are 60k or 2 million, it probably doesn't matter in the long run. Most of those dead were likely to die over the next decade, anyway. They just took a shortcut, so to speak.
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  41.  @oxunion  Haha, maybe you're right. I may just be making assumptions based on their outfit.
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  42. re. the C919: From a state perspective it makes sense to make national airlines buy that aircraft. It's not quite up to par, with shorter range and worse fuel economy than the A320 or the B737, but letting major Chinese airlines buy the C919 is essentially the State buying from the State: Bad for business, but good for national strategic priorities. Almost all Chinese airlines are state owned, except for some small carriers like Spring Airlines.
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  43. I don't think exports are down 60%. They are still growing, though slowly.
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  44. There is probably some potential for good profits in the Chinese stock markets now, given how cheap it has become, but I doubt it's going to be boom-town from here on: My guess is some improvement, followed by leveling out.
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  45. Yes, I would strongly recommend you buy a lot of food to prepare, so you don't end up like us down here in Shanghai.
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  46.  @thePOWERofART-11  Actually, the testing today was fine for me. They came to the neighborhood, put up some tables and I got it done in 30 minutes. Most of the wait time was taken up by old people who couldn't figure out how to register online.
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  47.  @tonysu8860  "25-33% of GDP contributed by a Real Estate Development sector". I think that 25% number (sometimes it's 20%, sometimes 30%) was based on 'Chinese telephone', with one news organization upping what they heard from another news organization and so on. When I looked into it last year, I could never find a source for those numbers. Rather, looking at the amount of money invested into the housing sector and comparing with GDP, it looked much more like 9-15%. It's also possible the 25% figure was true back in 2015, but not since then.
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  48. @Peak White Monkey Yes, perhaps limited. But I remember in the 80s in my country (in Scandinavia), commuter trains were filled with graffiti. We eventually got rid of most of it. I do firmly believe that we in the west have a cultural aspect that encourages/allows a youth culture that is not only very creative, but also violent. I clearly remember this from my teenage years. But maybe these things go together: Freedom-creativity-violence. If faced with a choice, I will go with freedom and take the consequences, rather than the other way, but it would be nice if we could reduce the negative aspects.
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  49.  @armymenaroundthehouse  You can never know for sure, but if they don't have the howitzers, why keep the shells?
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  50. It's interesting that Huawei's three newest chips all use the 7nm node. Their best lithography machines are designed for 28 nm production, but you can still make 7nm chips on them, just with more waste. It's like taking 10 photos of a distant object with an un-stabilized camera: Some of them will come out ok, others will be fuzzy and useless. But could Huawei and SMIC also go down to 5nm? And if they can, what will the yield be? My guess is that current 7nm yield on 28 nm machines is, at best, 80%. They may be willing to eat that loss, and the state is probably happy to chip in to cover that loss. But can they go on like this for years, or will they be stuck at 7nm?
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