1/14. A thread on India/China. A rumored but likely authentic notice of #Walmart moving it's "Supplier Enablement Team" from #China to #India has been circulating on Chinese social media. Is this the beginning of business decoupling? A few pointers.
2. First, my understanding is Supplier Enablement team is to help suppliers getting their business efficiently so Walmart has efficiency in its own part of business. It is likely tied to Walmart commitment to source $10 Billion of India-Made Goods Each Year by 2027.
3. But is this a leading event in a significant shift of international businesses moving from China to India? It remains to be seen & an active area of attention. Southeast Asia are the common denominator in many of these supply decisions on the ground.
4. A common mistake, both in China and US, is to view things happening on the ground through national lens. #Evergrande story is elevated to the level of China or CCP, while the story is much more about a larger-than-life CEO running a bad business with larger-than-life debt.
5. #Evergrande CEO is widely rumored to have paid tax fraud govt fine of one leading actress. Pure rumor. But do you really think the central govt is going to bail out a CEO w. that kind of reputation, unless it is a sudden and dire financial risk situation, which it is not?!
6. But India will be an important source of growth in Asia by its own right. You may remember pictures of Covid in India, while not noticing that India, the biggest democracy, is the best performing among Emerging market equity.

Not only that, India YTD is better than SP500.
7. We recently rebalanced earnings weighted India index and I personally believe in our ex-state-owned India doing well longer time. There are many similarities. China did the "bad bank" thing in 1999, which India has finally decided to do this year.
8. Is Walmart the trend, or it is just Walmart? Walmart as a business has not done well in China. Walmart has done poorly in Emerging Market last few years. @Costco revenue from Emerging market is increasing while decreasing for both Walmart India and China.
9. There are several articles on Walmart struggling in both China and India, as it has not find a way to connect with local customers. Costco has done much better, as cousin in Shanghai jokingly says, "shopping in Costco gives higher class feel (高级感)”
10. Side Disclosure: I shop at @Wegmans but @Costco certainly is Chinese American's favorite. I constantly ask sister-in-law help stock food from Costco when browse list (in Chinese but pictures should gave you general idea) with favorites from Costco. usmama.com/mom-review/256…
11. India fundraising via IPOs are red hot this year. That's partly why our earnings weighted India index has added more than 250 companies to the index.
12. Not unfamiliar to China watchers, India is selling SOEs on equity market to raise money. (State-owned Life Insurance Corp. of India, controls two-thirds of the Indian market with almost 300 million policies. Govt. plans to raise $24 billion. livemint.com/market/ipo/how…
13/14 #Indian #Tech: Paytm digital payments pioneer, backed by Alibaba and SoftBank, hopes to raise as much as $2.2 billion in what could be one of the country’s largest listings. forbes.com/sites/meghabah…
14/14 As expected, India has captured foreign equity flow this year. I am learning more about India as we do more research and will also constantly remind myself to focus on companies first, national generalization second.
15. China Supermarket is NOT dominated by big players/ripe for consolidation. 2020, Top 100 super market chains retail sales Yuan968Billion, 5.5% of national total. Among top 10 lists. Walmart 4th, French Carrefour 8th. Thankful for comments!
16. My recollection is India similar to China, less than 10% of retail super market is dominated by top 100 players/ripe for consolidation. Top 10 India: Big Bazaar, DMart ,Star Bazar, Hypercity, #Reliance Fresh, Spar, Spencer’s, More Retail, Food world, Reliance SMART
@Wegmans @Costco I shall say Costco is one high favorite among my circle of Chinese American families. Don't make general comment unless backed by hard data, reminding myself again.
17. Another example of India selling SOEs as China has done in many sectors the last 30 yrs: Tata Sons is set to acquire debt-laden Air India. Many large Chinese airlines are publicly listed but still majority state owned.

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More from @liqian_ren

12 Oct
1. A thread on three #PBOC 2021 Q2 Macro sentiment surveys from Bankers (Sample 3200), Industrial Companies (5000) and Urban Bank Customers (20,000). Surveys data are considered less informative and need to be heavily discounted, but could be complimentary to other data source.
2. Though data came from two diff. surveys, bankers and entrepreneurs have similar view:

Entrepreneur(Bankers) view on Macroeconomy 23.9%(25.5%) as “Cold”,72.6%(71.8%) “Normal”,3.5(2.7%)% “Hot”. Normal got 50 and HOT got 100. Indexes recovered to pre-Pandemic, Q3 lower than Q2
3. Product Selling Price (Raw Material Purchasing) Sentiment, 24.4%(47.1%) expect “Increase”,67.6% (49.6%) "Same",8.0%(3.2%) "Decrease”. Expect China PPI/CPI finally converge somewhat as companies raise prices on consumers. Some Q3 pull back from Q2.
Read 14 tweets
9 Oct
4. Is this regulation something new? It is officially codifying existing facts on the ground. The rumor is after the Edu regulation debacle/Edu Minister fired, this is govt trying to set it officially, so private capital doesn’t come in, then got banned, raising another uproar.
5. Will @caixin_intel /@Caijing be banned now? Likely not. They are state owned media, as Twitter labelled them thus, even though in China, they are considered somewhat opposition media and got article censored left and right.
6. What about Weibo/Tencent? First order effect are small because they were only in news distribution business, never in having actual journalists and news creation business. But there are some secondary effects.
Read 11 tweets
9 Oct
1 A thread on China NDRC proposed ban on private capital in news media business and potential impact on companies like #Weibo #Tencent, @caixin_intel, #36kr etc. and other private financial companies like #蓝鲸 #财联社 baijiahao.baidu.com/s?id=171306686…
2. NDRC:I have written about it and how central it is in China’s state-owned part of the business, which is still close to 40-50% of China GDP. It is central to understand the energy crisis because it has a say on coal production and electricity price.
3/12 China Market Entrance Regulations, similar to the Foreign Capital Entrance Regulations that's behind the reason for the VIE structure, creates a lot of arbitrage opportunities, if you are a brave lawyer/businessman. Link in Chinese of the 2021 Reg. ndrc.gov.cn/yjzxDownload/s…
Read 4 tweets
8 Oct
1. Is financial market pricing in some heightened Taiwan Strait war risk this week? Yes, a little. No perfect measure. With China on holiday last wk, can attribute some pop of 5-yr CDS price as caused by heighted attention, which happens around Oct with back to back national days
2. To put in context, China 5 Yr CDS value is 48.87, reveals a 0.81% implied probability of default, on a 40% recovery rate supposed. US 5 Yr CDS is 17.4, reveals a 0.29% implied probability of default. Recent increase in US mostly by the debt ceiling fight. #MintTheCoin hahaha
3. @PredictIt betting market doesn't have a Taiwan specific market, but has 3 China related contracts. Betting on who would be confirmed for next US Ambassador to China, and Pres. Xi's chance of staying as party General Secretary for next 10 years.
Read 11 tweets
7 Oct
1. Another question I constantly get: Can Chinese data be trusted? High Frequency data shop like Baidu or other private data source advertise their data showing similar thing as govt economic data, but more real time = acknowledgement of recent higher quality govt economic data.
2. Around 2014, the central government was extremely concerned that several northern provinces’ reported GDP numbers were overinflated by local officials. In 2016, the LiaoNing province in the north was asked to reduce its reported GDP figure by 22.4%.
3. 2018, after the fourth national economic census, 12 out of 15 northern provinces’ GDP estimates were adjusted lower, while 14 out of 16 southern provinces were adjusted higher. Jilin and HeilongJiang, both northern provinces, have respectively been adjusted down more than 20%.
Read 6 tweets
6 Oct
1.@AmbassadorTai not a trade but US Industrial Policy speech: "make smart domestic investment to increase competitiveness. invest in R&D and clean energy technology, strengthen manufacturing base, incentivize to Buy American up and down the supply chain." Self reliance anyone?
2. I thought I was the optimistic one for both US and China, but Marko Papic of Clocktower argued that in the near future, US-China relationship will get WORSE AND both US and China will have growth that surprises on the POSITIVE side!
3. In some way, it's not an unreasonable proposition. Both US/China are going to invest heavily at home in human/physical capital, which should bid well for near term growth. It's easy to see China/US in an investment race. The bills coming out of congress are in Trillions.
Read 7 tweets

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