2017-11-24

Chinese Logistics

Marc Cuban linked to a tweet that goes to a blog post about China. It's negative on Alibaba (BABA).


Some of the article I can't take a view on because I'm not up to date on all of Alibaba's business moves. However, it seems like the analysis is resting a bit on this photo:
Anyway, while I was traveling, I had a chance to peruse the Alibaba September Quarter figures, Press Release, 6K, Investor Presentation and of course, took some time to listen to the always entertaining Investor Call. Shortly thereafter, Alibaba had reported their amazing "Singles Day" sales figure of $25.3 Billion of fake GMV.

To put this figure in perspective, this year, "Singles Day" GMV came in at just a few billion more than the annual revenue of Sears/K-Mart (140,000 employees and 1,500 locations world-wide)..... again, I'll repeat that..... Alibaba sold, shipped and delivered the annual, global, sales volume of Sears/K-Mart in just one day! ....800 Million orders to deliver! Incredible! Bravo!.....all those guys on the tuk-tuks, scooters and bicycles must be exhausted......

The Alibaba business model has triumphed once again. It's now obvious that UPS, FedEx, DHL, et al, have it all wrong. Why in the world would anyone invest in all of that expensive GPS, scanning, package tracking automation and logistics hardware when you can just dump your packages on the sidewalk and let homeless people figure out how to get them where they are supposed to go? Again, the wizardry of Alibaba's ecosystem has rewritten the global-logistics playbook. Absolute genius....
I don't know if the logistics have improved over the past few years, but the Chinese post office was not a bastion of efficiency. The worst I'd ever seen was a guy standing in a sea of mailbags, packages everywhere, total chaos. It looked like a bomb went off. I gave him my claim ticket and he went back to find my package, and emerged with it after several minutes. The "private" delivery services are more efficient. I've seen scenes like the above, but in every case I can remember, it was outside of a main delivery area, such as outside the gates of a university or office building. Often, the students or office workers came out to pick up their package.

I'm positive Chinese delivery companies and the Post Office could increase efficiency. But what looks like total mayhem from the outside somehow manages to get packages where they're going.
1. Sell 800 million packages
2. ???
3. Customers receive their packages

The ??? is incredible amounts of human labor.

Amazon sold nearly $3 billion during its PrimeDay sale in July. Amazon is about as large as Alibaba (similar share of online sales). Unlike in the U.S., however, Single's Day is more like Black Friday and PrimeDay rolled into one. One firm estimated $4.7 billion in Amazon sales from Black Friday through Cyber Monday last year. Alibaba's claim of $23.5 billion in sales looks inflated even if those sales are all rolled into one, assuming some big ticket items aren't in the mix. (Did they offer deals on foreclosed properties and bad debt?)

China Cuts Tariffs on Consumer Goods

BBC: China cuts import tariffs on almost 200 consumer goods
China is cutting import tariffs on 187 consumer goods from whisky to cashmere clothing to help spur spending and economic growth.

The Finance Ministry said tariffs will drop from an average 17.3% to 7.7% on products, including pharmaceuticals, food, health supplements and clothing.

2017-11-21

New Home Prices Rise 0.3pc in October

Home prices fell or were flat in most of the first-tier and "hot" second-tier cities, but the number of cities with rising prices ticked up in October as developers cashed in on seasonal buying interest.

Prices increases were muted though. The largest rise was 1.7 percent in Harbin, next largest was 0.9 percent in Hohot and Nanchong.
NBS: 2017年10月份70个大中城市住宅销售价格变动情况

2017-11-20

Merkel Can't Form a Government

After Merkel's election "win" in September, I posted: Good Political News Peaks In Europe

I expected Merkel would be weakened, but it turns out she may be finished. She was unable to form a government thanks to rejecting to populist AfD and being rejected by the SPD. She was left with the smaller FDP and Greens, and they are to far apart on major issues. If you have been reading this blog for a few years you will not be surprised by the issue that torpedoed an agreement: immigration.

AFP: German coalition talks trip over immigration stumbling block
Merkel's CDU and especially their more conservative CSU allies from Bavaria, where tens of thousands of refugees crossed over the border from Austria, are pushing to limit Germany's annual intake to a benchmark figure of 200,000.

The Greens, who have long promoted migrant rights and a multicultural society, finally appear ready to accept the figure.

But they will not budge on their demand for a resumption of family reunions for those who have been granted temporary refuge in Germany, something opposed by both the CSU and FDP.

China Real Estate Mood Still Positive

At least in Nanjing, and when homes are offered at a 10,000 yuan/sqm discount.

Caijing: 南京1.46万人抢3177套限价房 有人斥资千万摇号
Cool the property market in the country is becoming the occasion, early winter Nanjing contrarian hot. Last week, more than 14,600 buyers who braved the cold, holding a picture of a few million dollars of bank promissory notes or certificates of deposit, real estate competition for 10 sets of 3177 Nanjing Hexi area housing prices.

After calculation, the total purchase verification of more than 37.8 billion yuan. Including one home buyers, even in five real estate registration number seven, into a number of banks to prepare for inspection at least 12.6 million yuan of funds.

It is understood that the hot property market in Nanjing, mainly due to price, resulting in the presence of about 10,000 yuan price difference between new and existing homes, which attracted a large number of buyers.

2017-11-16

Dual Citizenship Crisis in Australia

Coming soon to an Anglosphere nation near you.

Sunday Times: Eighth Australian lawmaker resigns over dual citizenship
A constitutional crisis roiling Australian politics claimed a new victim Tuesday with the resignation of the eighth lawmaker to be felled by a once-obscure rule barring dual citizens from federal office.

The departure of Jacqui Lambie, a colourful independent senator from the island state of Tasmania, comes after Prime Minister Malcolm Turnbull's centre-right government lost its grip on parliament as MPs were toppled by the citizenship issue.

Lambie announced her resignation in a tearful speech, telling MPs she had just learned she held British nationality from her Scottish grandfather and father.
The Australian situation was a result of existing law. The lawmakers in question are also citizens of New Zealand, Canada, Britain, Scotland and Canada.

If the law in other Anglosphere countries doesn't already proscribe dual citizenship, there will likely be laws passed in the coming decade or two, or at the very least, those with dual loyalties will be hounded from public office, lose security clearance and high ranking positions in government. Once the ball gets rolling on this issue, it creates its own incentives since political allies can benefit from having those above them kicked out of office. The United States won't be spared, if anything it is likely to have the most intense scrutiny because its status as empire provides real opportunities for foreigners to manipulate government policy.

2017-11-15

If China's Economy Goes, Australia's Goes With It

A very long and in-depth article on Australia's economy. If roughly one-third of Australian exports go to China and roughly 19 percent of the economy is exports, that's roughly 6 percent of GDP that is highly sensitive to Chinese economic conditions. Layer on the housing investment from China and overseas students, the housing bubble built on growth in those exports to China, there is a lot at stake if China slows meaningfully.

Steve Keen's Debtwatch: Australia’s Econ­omy is a House of Cards

NBS Shocker: Mortgage Growth Contracts 19pc in October, Goes Negative YTD

Caijing: 楼市数据继续下挫:个人按揭贷款增速首现负增长
National Bureau of Statistics released November 14 data show that the first 10 months of this year, the growth rate of the national real estate development and investment, sales, and other indicators of the funds in place to continue to decline. Among them, in September and October in a single month, real estate sales volume fell for two consecutive months. Affected by this, housing prices in the source of funds in place, the accumulated growth rate of individual mortgage loans for the first time negative growth.

The NBS report on real estate investment shows a YTD decline of 1 percent in individual mortgages.

For comparison, last year at this time the cumulative YTD growth was 51.5 percent.

I haven't tracked this data out of NBS, preferring the PBoC data, but I calculated the one-month October growth figure for this past month: negative 18.8 percent.