I don't think the author here understands what a geopolitical strategy actually is. From the piece, these are the actions the US will take to compete with China. "This strategy is a three-legged stool. The first consists of subsidies to build a viable technology manufacturing sector, from clean energy to semiconductors. The second is tariffs on Chinese imports that threaten those efforts. The third is restrictions on access to money, technology and know-how that could help China compete. A fourth leg, a unified economic front with allies, remains unrealized." Without a genuine understanding of what it is that America is actually up against means more of the same. China chipping away at the unipolar "rules based order" world of Post-WWII. https://www.wsj.com/economy/the-u-s-finally-has-a-strategy-to-compete-with-china-will-it-work-ce4ea6cf

The Chinese have pulled the trigger and are taking serious steps to address the local property market. No question it is a monumental task and there is no certainty that the steps now being taken will address the underlying issue. I would give credit for at least recognizing the structural threat that real estate is to the broader economy and actually trying to do something to address that threat.

CNBC

China pledges $42 billion in a slew of measures to support the struggling property sector

Chinese authorities on Friday pledged new support for state-owned enterprises to enable them to buy unsold apartments.

Beijing removes floor on mortgages rates, lowers downpayment China encourages local governments to buy commercial homes. The can has been kicked and those expecting China real estate to bring down the world will need to wait for another catalyst. https://www.bloomberg.com/news/articles/2024-05-17/china-removes-mortgage-rate-floor-for-individual-homebuyers-lwa88d1y?srnd=homepage-americas&sref=lgMFFI0d

So the Chinese look to be a bit more aggressive when it comes to exiting from their exposure to US treasury and agency bonds. $53billion sold off in Q1 alone. https://www.bloomberg.com/news/articles/2024-05-16/china-sells-record-sum-of-us-debt-amid-signs-of-diversification?sref=lgMFFI0d

Also this. Expect the volume to spike in the coming weeks and months among people expecting devaluation of the Chinese currency (Renminbi). The odds of such an event are extremely low. Not zero, but pretty damn close. China continues to have a plethora of non-currency related variables that support not just the export machine, but the economy on the whole. I continue to be mouth agaped at just how fundamentally in error all of the predictions about China continue to be.

Client Challenge

Regardless of any reporting to the contrary, the Chinese prefer a second Trump term over Biden. While Trump initiated the tariff trade war with China, it is widely viewed here that those actions were specifically taken on commercial grounds. Trump sought to bring China to the negotiating table. This, the Chinese understand and are willing to entertain. They even respected the move. For Biden, the Chinese see all tariffs as geopolitically motivated with the actually aim to further contain China. While that might actually be the right approach, the manner with which the Biden team is executing the strategy is far from subtle. America's real intentions are fully on display and that's not what you want. Just some food for thought as we kick off the day here in Shanghai. https://www.economist.com/finance-and-economics/2024/05/14/biden-outdoes-trump-with-ultra-high-china-tariffs

There's been a lot of coverage on China issuing a trillion RMB "special" government bond. This was widely telegraphed back in March and the primary aim - at the time - was to signal to both businesses and households that the policy makers were serious about addressing economic malaise. Tread carefully if you are among those viewing this as some tell tale sign of structural weakness within China's economy. There will be no "bazooka" of fiscal stimulus. All that this special bond represents is optics. It remains the case that Keynes is dead in China and that the actual priority among policy makers is to deleverage the economy. https://www.reuters.com/markets/rates-bonds/china-kick-off-1-trillion-yuan-stimulus-bond-issues-this-week-2024-05-13/

Now the focus of Hong Kong ETFs shifts towards the possibility of permitting Mainland access via the Stock Connect cross border program. Normally I'd be the first person to vehemently call this out as nothing more than wishful thinking. Then again I need to remind myself just how wrong I was about the actual approval of a Hong Kong Bitcoin ETF in the first place. Considered that wishful thinking too until the day approvals were announced. Suspect the odds of permitting Chinese to indirectly buy the Hong Kong ETFs as now 50-50. Moreover, I'd keep a close watch on July 1st for a possible approval. China normally likes to provide new "reforms" to Hong Kong on the handover anniversary.

South China Morning Post

At Bitcoin Asia, crypto enthusiasts look to tap mainland market

A mix of mainlanders and international visitors showed up at Bitcoin Asia amid surging interest owing to a crypto bull market and recently launched...

Talk about timely ..... here's a perfect New York Times opinion piece making the exact same claims as we've seen thousands of times before. I would add too that the author - Ann Stevenson-Yang - has been riding the "Death of China" grift for more than a decade. Granted, she is playing to her audience. Easier to wish calamity on your opponent rather than actually address acute problems at home. China has a myriad of issues. There is no question there. What is never addressed is just how policy is attempting to address those issues. I've no idea if any of the actions will work, but attempts are being made.

Opinion | China’s Dead-End Economy Is Bad News for Everyone (Published 2024)

China’s economy has reached a dead end. Getting out will mean more trade friction with the United States.

I'm still waiting for the "China set to collapse" outcome. For the better part of 20 years the so called smartest people out there have claimed a collapse is just around the corner. It hasn't yet played out, and I wouldn't hold your breath today either. All of the current weakness in China is the result of policy steering the country away from Keynesian spending. No question, following such a path has an impact in the short term. It should, however, put China on a much stronger fiscal foundation over time.

CNBC

‘I feel like I've been tricked’: Some property buyers in China’s Tianjin have been waiting 8 years for their homes

A group of around 1,500 homebuyers have yet to see the apartments they paid for about eight years ago, as challenges persist in China's property se...