The Chinese markets have recently been dominated by various stimulus rumors. These rumors are a reflection that policymakers have neared their material constraints, which will soon outweigh Beijing’s preference to remain patient.

...while China still dominates the supply of intermediary goods along the supply chain. 2) Although the US may be pivoting away from Chinese exports, non-US economies have behaved differently. China's continued trade dominance is the most powerful symbol of global multipolarity

...become more dependent on Chinese exports, especially Vietnam that has reportedly benefited the most from Sino-US trade tensions. Our charts suggest two things: 1) The Asian low-cost countries have only been able to become the final assembly base for products destined to US...

The FT chart below is a bit misleading. Yes, China's share of US imports has been declining since 2013. But during the same time period, China's share in the global export market has absolutely surged. More importantly, the low-cost Asian countries FT focused on have generally...

..., prefering US allies such as Europe and Japan, instead of China. This is either a regime shift that dooms China's capital markets, or a historical geopolitical alpha opportunity that investors could harvest in a more favorable macro environment.

The recent divergence between Chinese and other non-US equities provides a strong piece of evidence that institutional investors have been structrually moving out of China. Even if the Fed pivot incentizes an overweight to non-US assets, investors have become more selective...

7. Digital economy has created a total of 200mn jobs over the past 10 years. 8. The number of college graduates who chose to apply for graduate schools has risen from 2.9mn in 2019 to 4.57mn in 2022.

5. In 2022, the gov. and SOEs provided 860K more jobs, but that was merely 5% of total fresh graduates. 6. Private sector is the predominant driver of job growth. Over the past 10 years, for every 1% GDP growth, POEs brought 6.4mn jobs, compared with 1.8mn by SOEs.

...unable to find a job, 21mn due to corporate layoffs, and 8mn migrant workers forced out of cities due to the pandemic. 2. The average number of employees at A-share listed companies shrank by 11.9% compared with pre-pandemic levels. 3. 10% of SMEs closed in 2022.

4. Youth unemployment will likely increase by 5mn a year over the next 5 years, suggesting that there may be 50mn youth unemployed by 2028. This will be the most severe unemployment situation for China since the Reform & Opening Up in 1978.

This article provides a really good analysis on China's youth unemployment issue. Here is a rundown of the most interesting and concerning statistics: 1. A total of 54mn job loss over the past three years, of which 15mn are college graduates who are...