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Old October 29th, 2017, 04:35 PM   #11841
hkskyline
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Quote:
Originally Posted by ScientisT.bass View Post
The military and strategic thinking PLUS the real willingness for a high speed network covering the whole Asia are among the reasons. Military reasons are not silly at all. What other type of transport do you prefer? It is high volume high speed, just perfect. It is not the main reason but it is definitely not silly either.

The line shows China is serious about high speed link with Europe. It makes Moscow-Beijing a possibility and makes China part of the line almost complete.

It makes Urumqi a much attractive place for millions. Easy transport is very important for obvious reasons.

Actually this line demonstrates perfectly that the spending is public spending
Have you been to Urumqi? Have you seen the heavy police presence everywhere with watchposts every few blocks on the main streets? By the time they send the troops up from Lanzhou to quell a rebellion, it would have been too late 12 hours later. The fastest way to beef up the already heavy law enforcement presence is to fly the troops in.

The problem with a link with Central Asia and onwards to Moscow is whether those countries are willing to pay for it. So far, they haven't made an economic case to justify such a connection. So we see slow freight trains pass through instead.

The fact that so few trains ply between Lanzhou and Urumqi since that line opened is testament to this massive investment's questionable economics.
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Old October 29th, 2017, 04:39 PM   #11842
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Originally Posted by Pansori View Post
I'm not the one posting absurd comparisons though.
The most absurd opinion is one based on ignorance and not supported by facts, ie. yours. You still haven't presented any facts or evidence to support your "opinion".
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Old October 29th, 2017, 05:24 PM   #11843
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Quote:
Originally Posted by hkskyline View Post
The most absurd opinion is one based on ignorance and not supported by facts, ie. yours. You still haven't presented any facts or evidence to support your "opinion".
You post a statement amounting to nothing short of a nonsense and then ask for 'facts' to support that it is in fact a complete nonsense i.e. that state Railways are fundamentally different from privately funded housing developments. I mean how more absurd can you get? Perhaps you'd want me to provide facts to prove that frogs are not mammals? Or that buses cannot be used to fly to outer space? Absurd and nonsensical statements do not require facts to disprove them. There is a good reason those terms are used in the first place.
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Old October 29th, 2017, 05:29 PM   #11844
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Originally Posted by Pansori View Post
You post a statement amounting to nothing short of a nonsense and then ask for 'facts' to support that it is in fact a complete nonsense i.e. that state Railways are fundamentally different from privately funded housing developments. I mean how more absurd can you get? Perhaps you'd want me to provide facts to prove that frogs are not mammals? Or that buses cannot be used to fly to outer space? Absurd and nonsensical statements do not require facts to disprove them. There is a good reason those terms are used in the first place.
Both industries are heavily supported by government policy and specifically outlined in past development plans. So if you think 2 different industries cannot be fostered by the same government, you really think very absurdly. Have you read these reports and development plans that the party congress produces? Likely not, otherwise you would understand how China's developmental focus is shifting as its economic goals move. Don't blame others when you don't know in the first place.
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Old October 29th, 2017, 05:33 PM   #11845
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Originally Posted by hkskyline View Post
Both industries are heavily supported by government policy and specifically outlined in past development plans. So if you think 2 different industries cannot be fostered by the same government, you really think very absurdly. Have you read these reports and development plans that the party congress produces? Likely not, otherwise you would understand how China's developmental focus is shifting as its economic goals move. Don't blame others when you don't know in the first place.
I'm not blaming others. Just pointing out your superficial and shallow understanding of economics and China as a whole.
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Old October 29th, 2017, 05:43 PM   #11846
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I'm not blaming others. Just pointing out your superficial and shallow understanding of economics and China as a whole.
No. That's yourself. You failed to understand China's policy shift and reforms happening in the railway industry that shows your belief of that implicit government guarantee is incorrect.

You can easily find evidence of that everywhere on the financial markets. Take a look at the credit spread between China Railway's bonds and that they don't raise funds on the fixed income market by piggy-backing on the sovereign issues.

You can easily look up the share register of CRRC, which is listed in Hong Kong. There is a huge non-state-owned shareholding. So it is not really a strong SOE that other key pillar industries have.

You are aware there have been recent changes in the railway value chain in the country, right? You haven't even been able to quote some of these basic facts about the industry and its primary players. And who are you to accuse me of not knowing what's happening in China?
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Old October 29th, 2017, 06:01 PM   #11847
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Originally Posted by hkskyline View Post
And who are you to accuse me of not knowing what's happening in China?
Somebody with common sense?
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Old October 29th, 2017, 06:08 PM   #11848
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Originally Posted by Pansori View Post
Somebody with common sense?
People who think common sense is a reason are superficial and lack understanding of the complex workings within China's government ranks. Such people superficially read a few headlines to come up with a misinformed solution when much more is happening that is publicized that they fail to pick up, as in your case.

An easy search of the history of this railway company, how it is no longer the Ministry of Railways, can yield some enlightening information about China's railway industry.

Common sense is the silliest argument when facts can't be brought up.
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Old October 30th, 2017, 09:47 AM   #11849
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China's 600 km/h maglev train test line expects completion in 2021

http://www.crrcgc.cc/en/g7389/s14333/t279572.aspx

Ministry of Science and Technology has decided to transfer some key research projects over to enterprises, such as the CRRC, a conference on major special rail transportation projects announced in October 21.

CRRC was the first enterprise to take on the trial projects, who received seven out of ten projects from the Ministry of Science and Technology.

The project will be led by CRRC Qingdao Sifang Co Ltd. in Shandong province, one of the three subsidiary bullet-train makers. A high-speed maglev test line n Qingdao with a length of no less than 5 kilometers under the project is expected to be completed by 2021. Shandong province in East China plans to construct a high-speed maglev system that runs from Jinan, the province's capital city to Qingdao, which is the first operation line based on this project.

CRRC will also develop maglev trains with speeds of up to 200 km/h at CRRC Zhuzhou Electric Locomotive Co in Hunan province.

"The goal for these two projects is to establish domestic technology and standard systems for new-generation medium- and high-speed maglev transportation that can be applied globally," says Sun Bangcheng, deputy director of CRRC's office for major project development.

Investment in these projects will reach 3.22 billion yuan ($476 million; 437 million euros). The government will allocate 433 million yuan, with the remainder to be raised by CRRC.

Compared with other types of urban rail transportation, Sun says maglev trains are quiet and can achieve high speeds because they don't actually ride on rails with wheels but hover centimeters above the track through the use of magnets, avoiding friction, which reduces speed.

The world's first maglev line was launched in Shanghai in 2002, connecting a metro station to Shanghai Pudong International Airport. With speeds of up to 430 km/h, its 30 km route takes less than eight minutes to travel.

Beijing is also currently building a low-speed maglev urban rail route - the S1 line - which will pass through Shijingshan and end in Mentougou in the city's western outskirts. The 11-km line will be operational by the end of next year.

CRRC will also start research and development of cross-border high-speed trains that can run at 400 km/h and alternate between different track gauges, ranging from 60 cm to 1.676 meters.

"Such trains will consume 10 percent less energy than the country's 350 km/h bullet trains currently in use," says Sun Fuquan, a researcher specializing in railway vehicles at the Chinese Academy of Science and Technology for Development in Beijing.

China has seen rapid development of its high-speed railways in recent years, with their total length exceeding 20,000 km, the world's longest high-speed rail network.
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Old October 30th, 2017, 01:55 PM   #11850
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Quote:
Originally Posted by hkskyline View Post
Have you been to Urumqi? Have you seen the heavy police presence everywhere with watchposts every few blocks on the main streets? By the time they send the troops up from Lanzhou to quell a rebellion, it would have been too late 12 hours later. The fastest way to beef up the already heavy law enforcement presence is to fly the troops in.

The problem with a link with Central Asia and onwards to Moscow is whether those countries are willing to pay for it. So far, they haven't made an economic case to justify such a connection. So we see slow freight trains pass through instead.

The fact that so few trains ply between Lanzhou and Urumqi since that line opened is testament to this massive investment's questionable economics.
There's a lot of other military reasons for that HSR line than just rebellion and a rebellion would unlikely to be all over in 24 hours as you seem to assume. This has value and may for the Chinese be worth X billion Yuan.

The Central Asian 'Silk Road' connection at Khorgas and through to Iran are most likely going to be mostly 250 kmph mixed use lines eventually, with freight paying the bills and passengers lubricating the exchange of ideas and goods. This may also bring growth and regional stability which also has value to China and will connect with Urumqi-Lanzhou.

Russia is building Moscow Kazan with HS extensions planned for Yekaterinburg and Chelyabinsk, and Russia sees strategic value in HSR.

Tacheng is going to be where the 3rd China - Central Asian crossing will be and from there it's only ~1700km in a straight line to Chelyabinsk, and this could be built to 250kmph spec possibly, with again freight paying for the cost of the line. Considering the terrain, 250kmph specification shouldn't cost very much more.

Xinjiang is also considering building a HSR line from Turpan to Kashgar, which will also likely be uneconomic as a passenger line, but again, will have enormous strategic both military and belt and road wise, value.

Many belt and road railways have the potential to benefit from Lanzhou-Xinjiang, including potential links to Pakistan, Krygzstan, Tajikistan, Kazakhstan and Russia. This has huge value for China.

So while I accept that Lanzhou-Urmiqui doesn't make money now and won't for a long time, it's value is added to by value of supporting belt and road railways and also it's military value. Evidently the Chinese government either agree's with me, or has other reasons for building what they know are uneconomical lines in Western China, and I'm pretty sure those reasons are the ones I've listed here.
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Old October 30th, 2017, 03:31 PM   #11851
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There's a lot of other military reasons for that HSR line than just rebellion and a rebellion would unlikely to be all over in 24 hours as you seem to assume. This has value and may for the Chinese be worth X billion Yuan.

The Central Asian 'Silk Road' connection at Khorgas and through to Iran are most likely going to be mostly 250 kmph mixed use lines eventually, with freight paying the bills and passengers lubricating the exchange of ideas and goods. This may also bring growth and regional stability which also has value to China and will connect with Urumqi-Lanzhou.

Russia is building Moscow Kazan with HS extensions planned for Yekaterinburg and Chelyabinsk, and Russia sees strategic value in HSR.

Tacheng is going to be where the 3rd China - Central Asian crossing will be and from there it's only ~1700km in a straight line to Chelyabinsk, and this could be built to 250kmph spec possibly, with again freight paying for the cost of the line. Considering the terrain, 250kmph specification shouldn't cost very much more.

Xinjiang is also considering building a HSR line from Turpan to Kashgar, which will also likely be uneconomic as a passenger line, but again, will have enormous strategic both military and belt and road wise, value.

Many belt and road railways have the potential to benefit from Lanzhou-Xinjiang, including potential links to Pakistan, Krygzstan, Tajikistan, Kazakhstan and Russia. This has huge value for China.

So while I accept that Lanzhou-Urmiqui doesn't make money now and won't for a long time, it's value is added to by value of supporting belt and road railways and also it's military value. Evidently the Chinese government either agree's with me, or has other reasons for building what they know are uneconomical lines in Western China, and I'm pretty sure those reasons are the ones I've listed here.
Quite insightful.

I suppose once all the bits and pieces are built and pieced together, the overall line will be quite impressive, although the vast distances and sparesely-populated areas west of China probably means passenger service will never be profitable. Well, if all the governments can get their act together one by one to convince their people why such expensive projects are needed even with cheap Chinese loans. I've always thought for One Belt One Road, cheaper regular rail lines are more suitable to bring freight through that corridor.

I guess I'm more cynical, as I see the Lanzhou-Urumqi line being more symbolic to bring more tourists into Xinjiang (and Han settlers), while carefully screening the local Uigurs if they head east. This line passes through quite a long stretch of barren desert/wasteland, which is impossible to defend or safeguard when troops need to go such a long distance, so I'm not so convinced at the military value.

Being a tourist in that part of the world, I would really love to see the line extended from Urumqi to Kashgar. It is a painfully long journey by regular train now.
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Old October 30th, 2017, 04:52 PM   #11852
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Tourism and Xinjiang are two words that do not fit together. But this is my personal opinion. I doubt the Chinese government is too keen to promote tourism in Xinjiang.
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Old October 30th, 2017, 07:15 PM   #11853
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Tourism and Xinjiang are two words that do not fit together. But this is my personal opinion. I doubt the Chinese government is too keen to promote tourism in Xinjiang.
Probably not on the tourist radar in the West, but there are recent promotions such as this one from CNN : http://edition.cnn.com/travel/articl...vel/index.html

It fared quite well recently, hosting over 8 million tourists during the last Golden Week earlier this month :
http://news.xinhuanet.com/english/20..._136667513.htm

A bit off-the-beaten track indeed, and security concerns still hang over the region.
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Old November 1st, 2017, 10:17 AM   #11854
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These 8 million tourists are probably Chinese citizens.
Foreign tourists will have a hard time having a good time over there (checkpoints, not really a friendly environment to move around freely).
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Old November 1st, 2017, 12:48 PM   #11855
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Near Zhengzhou East station
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Old November 1st, 2017, 08:37 PM   #11856
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China on fast track for driverless train
http://www.chinadaily.com.cn/busines...t_33808745.htm

China is developing a "driverless" high-speed train that is expected to be put into use during the Beijing 2022 Winter Olympics, a senior railway official has said.

He Huawu, special technical adviser to the general manager of China Railway Corp, said researchers are carrying out experiments on the new train in a section of railway between Beijing and Zhangjiakou, Hebei province.

He made the remarks at Modern Railways 2017, an exhibition in Shanghai that opened on Thursday, according to a report published on Thursday by the Shanghai-based news website The Paper.

He was quoted as saying the new train will be running during the Beijing 2022 Winter Olympics and Paralympic Winter Games to show that "China has been ... going forward to develop a China model" for high-speed train.

Beijing and Zhangjiakou will co-host the 2022 Winter Olympics.

Compared with existing high-speed trains, the driverless train will be safer, with a better on-time performance, he added, without giving further details, such as the train's speed. But he also said employees will be on standby while the train operates on its own.

Sun Zhang, a professor at the Institute of Railway and Urban Rail Transit of Tongji University in Shanghai, told China Daily that artificial intelligence is the future for high-speed trains. "As the train speed will be raised to 350 kilometers per hour or even faster in the future, it requires a higher standard for safety control. Man is not as reliable as machine in train operation, since man will be distracted by his emotions, health conditions and other unexpected situations, which may pose great danger to travelers' safety," he said.

Sensors in the train and satellite systems will make the control room safer and more reliable, he added.

Yang Hao, a professor at the School of Traffic and Transportation of Beijing Jiaotong University, agreed that driverless is the future of high-speed train development.

But how to make self-driving trains handle any emergencies-for example, obstructions on the tracks-remains the most important problem yet to be solved, he said.

Wang Lan, director of the R&D Center of the China Academy of Railway Sciences, said that both China and France are working to develop independent technology to produce a self-driving high-speed train to provide a safer environment for travelers.

SNCF, France's national train operator, reportedly will begin testing a "drone train" in 2019 and launch the self-driven high-speed train by 2023, according to France Info.
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Old November 1st, 2017, 09:10 PM   #11857
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Why not? Both sectors were strongly backed by government policy. How well aware are you of China's 5-year plans and developmental methods over the past decade? Obviously little.
This analysis very well clarified why infra projects and housing markets cannot be compared, a good lesson for some I assume.

Infrastructure, not speculation, explains China’s corporate debt
http://www.atimes.com/article/infras...porate-debt-2/

Give a Western investor a word-association test with the word “China,” and the response will be “debt bubble.” Corporate debt levels in China, to be sure, look huge by international comparison. But a detailed look at the country’s corporate debt shows that infrastructure spending rather than speculation explains most of the debt growth of the past ten years.

Manufacturing, healthcare, and other major corporate sectors actually show declining leverage. The bulk of corporate debt has built up in energy, power production, rail, and airlines – sectors that in many other countries would be funded directly via the state budget. China has been borrowing mainly to expand infrastructure.

There are sectors where borrowing levels raise the concern of regulators, to be sure, especially in the property market. Although long-term property fundamentals remain strong, some property companies may have borrowed too much to get in front of consumer demand. This doesn’t appear to be a systemic problem, however.

In fact, corporate leverage is falling. According to the Bloomberg consensus of earnings estimates, the ratio of net debt to earnings before interest and taxes will fall to 2.5 times in 2018 from 3.71 in 2016. This ratio was negative as late as 2013 (companies were net creditors), but the trend has turned around.

Leverage is falling because profits are rising. In sharp contrast to price deflation and slumping profits in 2014-2015, China’s industrial profits are up 24% year-on-year, in line with rising industrial prices. Balance sheets are improving, leverage (as measured by the ratio of net debt to earnings before interest and taxes) is declining, equity prices are buoyant, and new equity issuance is at a record.

The sun is shining, in other words, and that’s the time to fix the roof. Chinese regulators at the ongoing party congress in Beijing have indicated they will take a tougher approach to controlling leverage growth. The long-serving head of the People’s Bank of China, Governor Zhou Xiaochuan, warned on October 18 that “excessive optimism” could give way to an eventual collapse in asset prices.

According to Bloomberg, “Zhou cited a concept known as a “Minsky Moment,” a plunge in asset values following unsustainable gains or the exhaustion of credit growth, named for Hyman Minsky.

The central bank chief told Bloomberg: “When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified. If we’re too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a Minsky Moment. That’s what we should particularly defend against.” Zhou cited high corporate borrowing, as well as corporations’ use of local government financing vehicles.

Zhou’s cautionary advice, though, describes a situation in which excess debt levels are localized in sectors that are best able to support them, rather than a generalized speculative excess.

The net debt of the non-financial components of the Shenzhen 300 Index is heavily concentrated in a dozen or so companies, all of which contribute to basic energy or transport infrastructure. A full 10% of the net debt of non-industrial SHSZ300 companies is owed by Petrochina alone. The companies listed above account for 2/3 of the net debt of the Shenzhen Index excluding financials, and they are almost all energy, communications infrastructure, shipping, airlines or metals companies.

Leverage has actually declined in some sectors while it has mushroomed in others. In the chart below we examine the ratio of net debt to EBITDA (earnings before interest, taxes, depreciation and amortization) of the sectors of the Shenzhen 300 stock index. For visual comparison the ratio is set to 100 as of September 1980.

The Industrials Index leverage is up 250% over the past ten years. This index consists overwhelmingly of infrastructure companies: Xinjiang Construction, CRRC (rolling stock), China Railway Group, China Shipbuilding, Daqin Railway, China Railway Construction, Shanghai International Airport and Weichai Power are its largest constituents.

In the past decade China has built a national high-speed rail network and vastly expanded other infrastructure. That is where the largest portion of “corporate debt” sits. The materials sector also shows a large increase in leverage. There, problems in the coal industry are mainly responsible for declining revenues relative to debt levels.

Consumer Discretionary companies’ leverage has actually declined sharply over the past decade. The auto sector dominates this index. The Consumer Staples Index, by contrast, shows a big jump in leverage, but that reflects borrowing by a small group of companies.

This analysis suggests that a great deal of Chinese corporate indebtedness should be viewed as “public works” investment by the Chinese state. Certainly, there are aspects of the increase in indebtedness that recall Japan’s dependence on public works spending as a channel for economic stimulus. There are inefficiencies to be made, for sure, but by and large the debt sits where the economy best can support it.
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Old November 2nd, 2017, 04:57 AM   #11858
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Quote:
Originally Posted by ccdk View Post
This analysis very well clarified why infra projects and housing markets cannot be compared, a good lesson for some I assume.

Infrastructure, not speculation, explains China’s corporate debt
http://www.atimes.com/article/infras...porate-debt-2/

Give a Western investor a word-association test with the word “China,” and the response will be “debt bubble.” Corporate debt levels in China, to be sure, look huge by international comparison. But a detailed look at the country’s corporate debt shows that infrastructure spending rather than speculation explains most of the debt growth of the past ten years.

Manufacturing, healthcare, and other major corporate sectors actually show declining leverage. The bulk of corporate debt has built up in energy, power production, rail, and airlines – sectors that in many other countries would be funded directly via the state budget. China has been borrowing mainly to expand infrastructure.

There are sectors where borrowing levels raise the concern of regulators, to be sure, especially in the property market. Although long-term property fundamentals remain strong, some property companies may have borrowed too much to get in front of consumer demand. This doesn’t appear to be a systemic problem, however.

In fact, corporate leverage is falling. According to the Bloomberg consensus of earnings estimates, the ratio of net debt to earnings before interest and taxes will fall to 2.5 times in 2018 from 3.71 in 2016. This ratio was negative as late as 2013 (companies were net creditors), but the trend has turned around.

Leverage is falling because profits are rising. In sharp contrast to price deflation and slumping profits in 2014-2015, China’s industrial profits are up 24% year-on-year, in line with rising industrial prices. Balance sheets are improving, leverage (as measured by the ratio of net debt to earnings before interest and taxes) is declining, equity prices are buoyant, and new equity issuance is at a record.

The sun is shining, in other words, and that’s the time to fix the roof. Chinese regulators at the ongoing party congress in Beijing have indicated they will take a tougher approach to controlling leverage growth. The long-serving head of the People’s Bank of China, Governor Zhou Xiaochuan, warned on October 18 that “excessive optimism” could give way to an eventual collapse in asset prices.

According to Bloomberg, “Zhou cited a concept known as a “Minsky Moment,” a plunge in asset values following unsustainable gains or the exhaustion of credit growth, named for Hyman Minsky.

The central bank chief told Bloomberg: “When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified. If we’re too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a Minsky Moment. That’s what we should particularly defend against.” Zhou cited high corporate borrowing, as well as corporations’ use of local government financing vehicles.

Zhou’s cautionary advice, though, describes a situation in which excess debt levels are localized in sectors that are best able to support them, rather than a generalized speculative excess.

The net debt of the non-financial components of the Shenzhen 300 Index is heavily concentrated in a dozen or so companies, all of which contribute to basic energy or transport infrastructure. A full 10% of the net debt of non-industrial SHSZ300 companies is owed by Petrochina alone. The companies listed above account for 2/3 of the net debt of the Shenzhen Index excluding financials, and they are almost all energy, communications infrastructure, shipping, airlines or metals companies.

Leverage has actually declined in some sectors while it has mushroomed in others. In the chart below we examine the ratio of net debt to EBITDA (earnings before interest, taxes, depreciation and amortization) of the sectors of the Shenzhen 300 stock index. For visual comparison the ratio is set to 100 as of September 1980.

The Industrials Index leverage is up 250% over the past ten years. This index consists overwhelmingly of infrastructure companies: Xinjiang Construction, CRRC (rolling stock), China Railway Group, China Shipbuilding, Daqin Railway, China Railway Construction, Shanghai International Airport and Weichai Power are its largest constituents.

In the past decade China has built a national high-speed rail network and vastly expanded other infrastructure. That is where the largest portion of “corporate debt” sits. The materials sector also shows a large increase in leverage. There, problems in the coal industry are mainly responsible for declining revenues relative to debt levels.

Consumer Discretionary companies’ leverage has actually declined sharply over the past decade. The auto sector dominates this index. The Consumer Staples Index, by contrast, shows a big jump in leverage, but that reflects borrowing by a small group of companies.

This analysis suggests that a great deal of Chinese corporate indebtedness should be viewed as “public works” investment by the Chinese state. Certainly, there are aspects of the increase in indebtedness that recall Japan’s dependence on public works spending as a channel for economic stimulus. There are inefficiencies to be made, for sure, but by and large the debt sits where the economy best can support it.
That article is quite superficial as well with several significant assumption flaws :

1. Other countries rose along the developmental ladder at a much different time than China when costs of borrowing were not at unprecedented lows like in the past decade. In China, there was ample liquidity in the banking system to absorb major loans so the state didn't need to use its budget to fund them. Nevertheless, where does the money for the budget come from? It can also be borrowing, but on the government's name.

By the way, the railway company also issues bonds in addition to borrowing under its own name, which shows the government is not willing to be on the hook and isolate any credit issues to the railway company directly. The implicit government guarantee is inherently weakened.

2. Long-term property fundamentals are no longer rosy as per the latest party congress when it was announced property is for living, and not speculation. Prices have also risen to the point where they are no longer affordable to the general masses. How is that a healthy set of fundamentals?

3. The railway company's profits are falling while debt is rising. That's easy to find in the stock exchange filings. So most of the article falls apart to this sector. There is no quick way to fix this, and it has nothing to do with economic cycles either. Trains are getting more and more passengers.

4. This study generalizes across industries, and says nothing over government policy shift. As we saw when real estate no longer became the state's darling, several companies defaulted regardless of what these general numbers say.

5. So public works loans under a corporate name don't need to be repaid, but a state's borrowing can hide elsewhere on the balance sheet?

Where in the article does it say infra (specifically railways) can't be compared to other industries?

Finally, One Belt One Road is not a policy that can be explained by "Western" economics. It is all about building in places that Western banks shun, but the Chinese can make it work because it can force the demand through it. No Western bank can model, quantify, or trust this to materialize.
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Old November 2nd, 2017, 06:46 AM   #11859
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Alright, the whole discussion stemmed from a news piece in a Japanese media without any valid sources and full of "speculations". Granted, the debt problem for CRC cannot be overlooked. Yet you brought the discussion up a notch by assuming the Chinese gov. and policy makers will somehow decide to go against the current HSR development because the debt issue, which might subsequently lead to the busting of CRC.

If, as you argued, the Chinese gov. is really that irresponsible and created one after another bad projects on the national level, and as soon as they see problems, they will just ditch it and projects after projects will become blackholes, the gov. would have already gone busted. In addition, if the policy makers already saw the debt problem, why do they still making plans to extend the HSR network to 30K by 2020?

I am looking at the issue from another angle, if the CRC is trying to reform and shed it's unprofitable business units, isn't that a good thing in the long term and will make the CRC more competitive? Actually that's the exact purpose of the merger between CSR and CNR, to be more competitive on the international market!

As for the property market, as many forumers pointed out, it's private sector driven by demand. The gov. tried multiple attempts to curb the housing price from rising further but each time it only worked for a very brief period of time, hence I do not believe the gov. policy is in favor of the property market. China is in a rapid urbanization period thus the demand for housing is quite high in the cities, the gov. is trying to restrict housing price as a way to help its people, but this is a dilemma.

HSR development is infra work and directed by policies, and I do not see any policies against this development. You can compare on the policy level but not between policy and market.

Also, some posts ago you cited an article from China Daily, which clearly mentioned the profit rose >10% for CRC, but debt is going up at a slightly faster pace than profitability. You are clearly contradicting yourself. There is no point to argue for the sake of argue.
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Old November 2nd, 2017, 09:35 AM   #11860
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Quote:
Originally Posted by doc7austin View Post
These 8 million tourists are probably Chinese citizens.
Foreign tourists will have a hard time having a good time over there (checkpoints, not really a friendly environment to move around freely).
After travelling along the Silk Road in Gansu for the best part of a decade, I have seen a huge change in the make-up of the Foreign tourists along this route. I would even include myself in that too, after being fearful, I ventured further west into Xinjiang for the first time this year. It was better than I could ever have expected.

Originally, the people I would meet out west were hardy adventurer backpackers and those determined to go where no others had been. Otherwise I might have met one or two foreigners assigned to work in the region. However over the years, the numbers of foreigners in escorted tours has exploded and grown year on year. In addition to this, so has the standard of staff, the facilities and hotels that have been built to serve this influx of travellers. On my journey this year, I more independent tourists and couples, doing their own thing in Western China.

Naturally, the security situation in Xinjiang is at first off-putting but not worse than Israel, which has a large tourist industry with a strong security presence. The natural scenery, the historical aspect, food, culture and most importantly the people, this all made up for the relative inconveniences surrounding you.

In fact, some of the extra efforts were comical and made for some novel entertainment. The highlights though were the welcomes I got from all the local people, especially the children. I will not hesitate in recommending travel to Xinjiang to any of my friends, especially with the ease that the Urumqi-Lanzhou HSR has brought to travel in this region.
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