So let's return to China energy and journalism and what is really the problem with journalism is that by providing bad information it provides distorted understanding of how to solve the problem. When the China energy issue first started coming out the two issues mentioned 1/n
Were this was because of Xi's deeply held environmentalism (ok little embellishment here) and those freaking Australians. Why those two? Well they were in the news and vaguely had some link to the problem so let's mention them as the reason why even though any basic 2/n
Research would have shown that Australia coal plays a tiny part of Chinese energy and the environment well let's not go down that smog lined road but that what journos said it was. Why does this matter? It provides a very distorted really false or inaccurate picture of the 3/n
ACTUAL problem causing energy shortages. The reality matters because it helps you diagnose the problem but we are clearly working with faulty data. Mentally what happened was like reading the score of a game and then creating a game story with no knowledge of the game 4/n
Seeing an score or result with really no or minimal knowledge of how a result was obtained typically provides a very distorted view of how to solve the problem. In other words, a narrative was created regardless of truth. In this case, two handy narratives were created 5/n
That were very simple and news worthy that played into convenient narratives: conflict with Australia and this time Xi really means his environmentalism. It wasn't and he didn't. Fast forward a couple of weeks and what do we see? China buying every spare piece of coal 6/n
It can find, stimulating coal output, and yes, even offloading Australian coal though that has no impact on the overall picture. Sorry environment. If I was cynical it would be easy to argue journos were trying to pave the way for a Kerry Xi deal given how often they 7/n
Charlie Brown Xi's football. In reality, there is a pretty mundane answer that central planning failed yet again due to bureaucratic price caps they are now easing. However, that is not a political narrative that draws page clicks however that's the reality. When truth 8/n
is prioritized over simple politically convenient narratives better diagnoses are provided. Journalism is needed but it must move away from political and simple narratives with a focus on the truth. That's why it needs to do better.

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More from @BaldingsWorld

5 Oct
There's famous Biblical parable where a master goes away for sometime and leaves talents to his servants. The last servant returns upon the masters arrival and says here is the talent you gave me. The master asks what did you do with it while I was away. The servant responds 1/n
I buried it. This seems like a perfect analogy for the first year of the Biden administration foreign policy focusing on China and generally the world at large. The closest thing there would be to a significant new movement is AUKUS but that was instigated by Australia 2/n
Everything else is just nibbling at the edges backwards or forwards of everything Trump. Biden policy on China to date is just Trump. That's it. Period. Couple minor steps forward and a couple minor steps back but basically nothing. What is even more astounding 3/n
Read 9 tweets
4 Oct
There is an important aspect to understanding how money, ideas, universities, and think tanks work. When donors give money to a university or think for let's say a "China Center" (though pretty much applies to anything else) everyone involved is smart enough to avoid the 1/n
Paper trail in litigation that would wreck them. By that I mean the public statements and private contracts will all say the right things about respecting academic freedom, no strings attached to the money, that allows them to claim no influence from donors 2/n
Put another way, I've personally never witnessed nor heard credible evidence of an academic or think tank publishing something because they were told what to say or were contractually obligated. However, that does not absolve universities or think tanks because what happens 3/n
Read 12 tweets
27 Sep
Short thread on China electricity and epistemology. There is in all things a rush to impute motives or generate an understanding about a situation based upon pre-existing mental framework when the reality is we know very few facts about a situation. China electricity is great 1/n
I started hearing about this and other situations a few weeks ago but it made no sense why. There was no obvious reason why China should be facing electrical shortages. All of the narratives had glaring holes. It was only after talking to a number of people the pieces came 2/n
Together that was confirmed with multiple people. Now it is still important to note we really do not understand a lot here though the mechanics of the situation are clear. By that I mean, it is clear facts that end user price is fixed, generators buy basically at spot 3/n
Read 9 tweets
26 Sep
I am happy to criticize Biden or any one for that matter but in this Biden is absolutely right. Let's hit the highlights. 1. Quad can cooperate because they share values but also because they share interests on China. Whether it is moving supply chains 1/n politico.eu/article/us-joe…
Or improving security cooperation and capabilities. Europe fails on both accounts. They want to cooperate more with China and are unprepared to do most anything on security about any of the big authoritarian problems. Add n Europe is dysfunctional to a degree that nothing 2/n
Happens, one wonders what they even bring to the table or if they can accomplish anything. 2. The underlying complaint from Europe is a divergent view of how each side views multilateralism. Add I have emphasized repeatedly, multilateralism is not an ends but s means 3/n
Read 6 tweets
22 Sep
At the risk of touting my own research, let me explain how China does some of the crazy stuff it does in banking and capital markets to the uninitiated some of which comes from a paper I wrote 7 years ago now about some of the games they play 1/n papers.ssrn.com/sol3/papers.cf…
At least historically, when Chinese banks went public in Hong Kong they were stunningly honest in the IPO prospectuses probably because HK was still a pretty honest market, the lawyers were good, costs to non-compliance were not insignificant and they figured no one read them 2/n
Consequently, if you get hopped up enough on meth of get through 1,000+ pages you learn amazing stuff. The two things that I want to highlight here are what are Chinese lending standards and how do they bailout/disguise bad debt? Even most savy investors think these concepts 3/n
Read 17 tweets
20 Sep
I think there is an important definitional point that is taken for granted but shouldn't be about Evergrande. What do we mean by bailout? In the west we typically take it to mean a company is about the declare bankruptcy or collapse and the government steps up and writes 1/n
A big check to keep the company going. In China for many reasons, bail out needs to be defined much more broadly. What if a local SOE buys one of the unfinished developments at near historical investment cost. Is that a bail out? Likely yes. What if the government 2/n
Tells retail WMP holders they get nothing for redemption in the next 30 days but if they extend the duration 5 years and lower the interest rate, they will get paid off. Is that a bail out? Probably. What if a bad bank asset manager buys a loan from a mid size bank above 3/n
Read 8 tweets

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