And as a reader in China who appreciate your work on China, I believe your analysis on China still have ample room to improve if you can take into consideration of the crucial dynamics between central government and local government from an institutional approach. Everything that seems unreasonable to outsiders stems from that. Personally I'd recommend Stanford Prof Xueguang Zhou's book The Logic of Governance in China on this topic.
Agreed! There's a lot I don't know and as an outsider can never know.
To some extent that's also part of the problem as we see it though, the complexity of the government / SOE / private sector is even more complicated when you start looking at it from a regional/local level.
A lot of the reason that bailouts and recaps take time is that you have different interest groups lobbying the government to get a 'better deal' or bailout. So that it's not just a matter of 'we need to bail out these 20 firms' but more 'who are the winners and losers here.'
The risk from property sector and those small banks in China is closely related to local government debt, Trivium China recently published a post on how to defuse this risk https://triviumchina.com/our-thoughts/defusing-local-government-debt-risks-whats-in-the-politburos-basket/ Although how to manage the fallout for those small banks remain to be seen.
And as a reader in China who appreciate your work on China, I believe your analysis on China still have ample room to improve if you can take into consideration of the crucial dynamics between central government and local government from an institutional approach. Everything that seems unreasonable to outsiders stems from that. Personally I'd recommend Stanford Prof Xueguang Zhou's book The Logic of Governance in China on this topic.
Agreed! There's a lot I don't know and as an outsider can never know.
To some extent that's also part of the problem as we see it though, the complexity of the government / SOE / private sector is even more complicated when you start looking at it from a regional/local level.
A lot of the reason that bailouts and recaps take time is that you have different interest groups lobbying the government to get a 'better deal' or bailout. So that it's not just a matter of 'we need to bail out these 20 firms' but more 'who are the winners and losers here.'
what is your current take on the investment atractivnes of the Hong Kong/China Markets?
Top analysis
Great analysis! I enjoyed reading this!