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China Overtakes Japan as World’s Second-Biggest Stock Market

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Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#21

Post by enupten »

w1ntermute wrote: post #19
jim_greco wrote: post #15

Earlier quoted context omitted.

It's conveinent to see things through western or SV capitalism eyes, but Japan's 'malaise' is all about demographics and a 20 year inept Government response to deflation. If you look at metrics like GDP per working age adult, household net worth, etc then it's a very different story.

> Japan's 'malaise' is all about demographics and a 20 year inept Government response to deflation. Why do you think the demographic issue exists? Low birth rates are due to gender inequality and long working hours, both of which are endemic in the Sinosphere. And the government's failure (which goes far beyond not tackling deflation) is due to its cozy relationships with incumbent firms - a factor that makes it very…

By that logic, Western europe's low birth rates are due to ... ding ding ding! gender inequality and long working hours. Pah.

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#22

Post by a_c_s »

lkrubner wrote: post #13
a_c_s wrote: post #4

Given that China's population is 10.8x Japan's, this seems inevitable. Is there more to this that make it notable that I'm missing? Source: https://www.wolframalpha.com/input/?i=china+population+%2F+j...

By that line of reasoning, India's stock market should be the same size as China's, and both China and India should have a stock market that is 4 times bigger than the USA. But that is not going to happen.

As developing economies 'develop' their per-capita GDP approaches that of developed economies. Therefore, as this happens, the size of an economy becomes more proportional to the population size.

Therefore over the very long term that absolutely should happen.

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#23

Post by kissickas »

enupten wrote: post #21
w1ntermute wrote: post #19

Earlier quoted context omitted.

> Japan's 'malaise' is all about demographics and a 20 year inept Government response to deflation. Why do you think the demographic issue exists? Low birth rates are due to gender inequality and long working hours, both of which are endemic in the Sinosphere. And the government's failure (which goes far beyond not tackling deflation) is due to its cozy relationships with incumbent firms - a factor that makes it very…

By that logic, Western europe's low birth rates are due to ... ding ding ding! gender inequality and long working hours. Pah.

Good point. Without looking anything up, I'm pretty sure the demographic difference is due to differences in immigration policy, correct?

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#24

Post by w1ntermute »

enupten wrote: post #21
w1ntermute wrote: post #19

Earlier quoted context omitted.

> Japan's 'malaise' is all about demographics and a 20 year inept Government response to deflation. Why do you think the demographic issue exists? Low birth rates are due to gender inequality and long working hours, both of which are endemic in the Sinosphere. And the government's failure (which goes far beyond not tackling deflation) is due to its cozy relationships with incumbent firms - a factor that makes it very…

By that logic, Western europe's low birth rates are due to ... ding ding ding! gender inequality and long working hours. Pah.

Did you even bother to look at the statistics before making such an ignorant comment? The fertility rates in countries like Taiwan, South Korea, and Singapore are much lower than in Western Europe.

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#25

Post by dmix »

w1ntermute wrote: post #8
dmix wrote: post #5

Earlier quoted context omitted.

Counter to most western thought, you can in fact have heavy social control but small-government in terms of economics ala Singapore and have a country make rapid economic process. China's CRC can loosen their grip on business, or selectively ignore it often enough, while still maintaining heavy control of culture and social issues, while still maintaining high growth rates. As we've seen in the last few decades. It d…

> you can in fact have heavy social control but small-government in terms of economics ala Singapore and have a country make rapid economic process. Singapore's rapid economic progress is due to anything but small government. If you read Lee Kuan-yew's memoirs, you'll see the lengths to which the Singaporean government went to kowtow to Western (and later, Japanese) multinationals. They rolled out the red carpet over…

Regarding #3, he said that the reason they can't control people as they move to cities is to:

a) the use of cellphones/internet spreads information

b) their ability to collectivize and locally share information in high-density cities

But have you read any recent books on China post-internet? They have largely succeeded in maintaining control of the peoples perceptions of vast amounts of issues. They might not be able to stop CNN/Tweets from getting out but they have an incredibly powerful propoganda machine that makes sure all the citizens distrust Western dissent.

So even with access people question it and

Second, the government employees a massive '50-cent army' to sway opinion all over the internet. Thousands of people who endless comment on websites in highly deceptive ways.

Third, the party co-opts popular influencial youth such as Han-han [0] and Zhou Xiaoping [1], and makes sure their message is anti-western and pro-state (with degrees of restraint to make it non-obvious).

Fourth, those cell phones have nothing but helped the Chinese party pick up and 'disappear' any dissidents.

So I disagree with Lee Kuan-yew that China can not maintain control. They have and are.

1 out of 3 people in China work for the party, how can they not maintain control?

[0] https://en.wikipedia.org/wiki/Han_Han

[1] http://www.foreignpolicy.com/articles/2014/10/21/is_this_the...

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#26

Post by dmix »

dageshi wrote: post #11
dmix wrote: post #5

Earlier quoted context omitted.

Counter to most western thought, you can in fact have heavy social control but small-government in terms of economics ala Singapore and have a country make rapid economic process. China's CRC can loosen their grip on business, or selectively ignore it often enough, while still maintaining heavy control of culture and social issues, while still maintaining high growth rates. As we've seen in the last few decades. It d…

Can you point to any other examples other than Singapore or Hong Kong? Both of these to me take advantage of inefficient neighbouring countries (in a doing business sense) to offer a safe place for those with the resources to do business. I don't know if you can apply that example to somewhere like China. I also cannot see them lessening their grip on business. Ultimately money is power and in the past the Communist…

I agree that it is a bad idea to apply Singapore as an example for China. Just as people can't apply Finland to America. But there may be something about small-isolated economic-centric city-states. They might have way less overhead for political progress and action and the highest-levels are in sync with local issues, since local issues is targetted.

For example, Silicon Valley might have different issues with immigration than say Texas. But SV has to deal with Texas congressmen regarding policy.

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#27

Post by Alphasite_ »

melling wrote: post #7
a_c_s wrote: post #4

Given that China's population is 10.8x Japan's, this seems inevitable. Is there more to this that make it notable that I'm missing? Source: https://www.wolframalpha.com/input/?i=china+population+%2F+j...

I don't think a country's size correlates to its stock market size. http://www.internetworldstats.com/stats8.htm So, I don't see why you would think that's inevitable.

Given countries or reasonably similar per capita wealth it stands to reason that they stand reasonably close together.

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#28

Post by adventured »

mathattack wrote: post #9
npalli wrote: post #2

Here is a scary detail, Japan's stock market capitalization over the last twenty five years. Look how it keeps cycling around $4 Trillion. Year Value 1988 $3,910,000,000,000 1989 $4,390,000,000,000 1990 $2,920,000,000,000 1991 $3,130,000,000,000 1992 $2,400,000,000,000 1993 $2,999,760,000,000 1994 $3,719,910,000,000 1995 $3,667,290,000,000 1996 $3,088,850,000,000 1997 $2,216,700,000,000 1998 $2,495,760,000,000 1999 $…

A couple things to note on this: 1) Market cap changes of the stock market doesn't tell much. If a company changes it's capital structure (more or less debt relative to stock, or Private Buyouts) the market cap changes. 2) A better metric would be "Total value of the equity and debt of all the companies" with an equity and debt breakout. 3) Even still, this would miss privately held companies. It also would just meas…

That's not true.

A company taking on more debt does not automatically alter its market cap. There is no automatic correlation for any given valuation metric, whether we're talking about how high a PE ratio should be, or how debt should be valued when deciding if a market cap is reasonable.

Your 1) item rests on the efficient market theory, which is false.

It is entirely up to investors - their reasoning and emotion - and it typically varies significantly from one industry to another, and from one company to another. For some companies, taking on debt will not alter the market cap what-so-ever. Apple for example, viewed as an extremely healthy company with massive earnings, can take on debt without it denting their market cap in a negative way.

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#29

Post by adventured »

jim_greco wrote: post #15
w1ntermute wrote: post #3

I wonder if the rest of the Sinosphere will eventually suffer from the same sort of economic malaise as Japan, once they reach first-world status. They all have hierarchical cultures that make creative destruction difficult. So while they can quickly catch up to the West through efficient social organization, they can't break them down and replace them with something better.

It's conveinent to see things through western or SV capitalism eyes, but Japan's 'malaise' is all about demographics and a 20 year inept Government response to deflation. If you look at metrics like GDP per working age adult, household net worth, etc then it's a very different story.

Japan hasn't suffered any meaningful deflation in the last 25 years. In fact, they've suffered immense inflation, as have most major economies. That's why they have among the highest costs of living on earth, their consumer goods are expensive, and almost everything in Tokyo costs a fortune.

Run 2% deflation against 25 years, and tell me consumer goods in Japan should cost what they do.

The only thing Japan suffered, was the bursting of a real estate bubble. Following that, they accumulated insane sums of debt trying to fake continued prosperity and avoid the standard of living drop that was inevitable (and is now arriving anyway). Asset prices going down is not inherently deflation, in the case of Japan it was fake wealth that never should have existed in the first place.

Re: China Overtakes Japan as World’s Second-Biggest Stock Market

#30

Post by adventured »

w1ntermute wrote: post #24
enupten wrote: post #21

Earlier quoted context omitted.

By that logic, Western europe's low birth rates are due to ... ding ding ding! gender inequality and long working hours. Pah.

Did you even bother to look at the statistics before making such an ignorant comment? The fertility rates in countries like Taiwan, South Korea, and Singapore are much lower than in Western Europe.

That's false. Much of Europe is in the same exact demographic spiral. Europe as an overall, is in worse shape than is Asia. Most of the countries making up the bottom of the low fertility club, are in Europe.

Births per 1,000 people

Japan: 8.07; Singapore: 8.10; Germany: 8.42; Slovenia: 8.54; Taiwan: 8.55; Austria: 8.76; Greece: 8.80; Italy: 8.84; Bulgaria: 8.92; Hungary: 9.26; Romania: 9.27; Hong Kong: 9.38; Portugal: 9.42; Poland: 9.77; Czech: 9.79; Spain 9.88

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