Author: admin

Lovely and random encounters

I was going to order coffee downstairs.

Met a couple, Cindy and Fab, when they were trying to order. They are in their 60s and on their 4-month vacation. They used to work in Indiana and now live in Florida.

I just realized how lovely these random conversations can be. I feel I used to have a lot of these (I might have exaggerated here) back in the states, but rarely so in China.

Maybe it’s about me.

Maybe I feel the expected outcome from random conversations is less interesting here in China, so I wasn’t intrigued to welcome one.

Maybe my attitude to life has changed a bit – I became less exploratory and want more certainty. This could be due to the distaste of negative randomness in stock market – I was exposed to a lot of it in work and in personal investing.

However, those are temporary, if anything. I felt the impulse again and that’s nothing different from what I could feel years back.

Existing home price index near flattish in Feb 2025 across tier-1 cities

In Feb 2025, the price index of existing home across BJ/SH/SZ averaged is only -1.4% yoy, about flattish.

As of Mar 2025 data, price index of existing home across BJ/SH/SZ averaged has improved for 6 consecutive month (Oct 2024 – Mar 2025), by about 0.44% every month.

The five month from Oct to Feb month has helped the yoy comparison improve 8.6% (from -10% to -1.4%).

 

Vanke no more monthly report?

It was a tradition for Vanke to disclose its official monthly sales report, which includes information such as sqm (pre) sold, $ amount (pre) sold, and new projects added.

Here is the last one for Dec 2024 monthly report from Vanke; haven’t found 2025 monthly reports for Jan, Feb and Mar 2025.

Here is a monthly chart for monthly contracted sales in rmb 100mn, from Jul 2022 to Dec 2024.

Railroads change cities’ fate

Read some interesting discussion on railroad build-outs in early 20th century in China, and its impact on cities.

Before railroads expanded, China’s economy relied a lot of waterways / canals.

Railroads changed the trajectory of cities. Traditional waterborne centers were sidelined and small towns can quickly become new centers, for example,

津浦铁路: Linqing fell; Dezhou rose

京汉铁路: Kaifeng fell; Zhengzhou rose

Additionally, if two railways are built with different standard, they shall create a city, for example,

Shijiazhuang: Zhengtai Railway (metre gauge) intersecting Jinghan line (standard gauge)

Changchun: Chinese Eastern Railway (broad gauge) intersecting South Manchuria Railway (standard gauge).

Beijing’s 1q25 consumption..

Overall retail sales dropped 3.3% yoy in the first quarter of 2025 in Beijing, with March dropping 10% yoy.

Auto contributed nearly 2% of the drop (-20% x 10%).

Meanwhile, average spending looks okay – it’s rising 2.3% yoy. It’s a very good number for Beijing actually.

It might be due to the parallel export (?) – people bought cars and export (e.g. Russia).

Are things really bad?

S&P 500 has declined 10% YTD. It dropped as much as 15% till Apr 8, before a tariff pause was announced.

Things have since recovered a bit.

E.g. after Walmart missed guidance on Feb 20, its stock has only dropped 4.1% (Feb 20 to Apr 17). To be fair, the one day drop on earnings is bigger – 6.5%!

Walmart guided 3-4% annual revenue growth, 3.5% to 5.5% adj. operating income growth, flat to 3.6% adj. EPS growth. Considering the 50bps of FX headwind, organic adj. EPS growth is guided at 3.6% at mid-point.

On Apr 9, Walmart pulled Q1 profit guidance, but maintained full year guidance.

 

 

What are people buying?

Clearly not LVMH.

 

The core fashion and leather goods has not been growing much since 2024.

 

Back in 2018, LVMH still grew 10% yoy.

Back in 2008, LVMH still grew 4.3% yoy.

In 2009, LVMH revenue decline by 1% yoy. However, the fashion and leather goods segment still grew ~5% in 2009.

 

Core issue with USD

The unofficial “Mar-a-Lago Accord” raised this issue – that USD as a reserve currency bears additional burden.

Countries bought US Treasury to facilitate trade with another nation (not necessarily the US), thus creating an inelastic demand and causing USD to appreciate.

This appreciation shall weaken US export, especially in the manufacturing sector.

Such phenomena reflect what can be described as a “Triffin world,” after Belgian economist Robert Triffin..

However, when the reserve country is smaller relative to the rest of the world—say, because global growth exceeds the reserve country’s growth for a long period of time—tensions build and the distance between the Triffin equilibrium and the trade equilibrium can be quite large.

Source: A User’s Guide to Restructuring the Global Trading System

Another interesting point from the artcle.

..value-added taxes are a form of tariffs because they exempt exported goods but tax imported goods.