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Trinh Profile picture
Trinh
@Trinhnomics
Mother, wife, daughter, EM Asia economist @natixis; non-resident scholar @carnegieendow; Cheer-leader of life/markets; Vietnamese, Californian, living in HK
Shrivathsa. B Profile picture bui xuan chinh Profile picture Vishwas Profile picture Maje Swanoc Profile picture deepak manek Profile picture 85 subscribed
Jun 18 • 12 tweets • 5 min read
As a follow up to that podcast, Bloomberg had a story that just came out that blew my mind. I knew it but they really dug deep.

This is a story about economics, resources, comparative advantage & the choices we make.

Nickel. What do you know about it?

bloomberg.com/features/2024-…Image First, nickel is a material that has to be DUG out of the earth & process. Some easier (colder nickel in Russia) & some harder like wet & warm places like Indonesia where you have plenty of it but it's the processing that's difficult.

Here comes China.
Jun 17 • 6 tweets • 2 min read
China new home sales fall further & while some may say that the real estate is now not so important for China, it remains a key driver of wealth effects & that is negative. Meaning, the data dump that we will get in 10 mins will likely show a further misaligned economy where consumption falters while supply rises. This will add to further tensions with the West & even the South as China will need to export that excess supply, driven by policy to rise in the value chain, or to vertically integrate its supply chain, to the rest of the world.

Chinese corporates will increasingly have to do it via tariff arbitrage, as in third country export or building factories where they want to sell.
Jun 14 • 15 tweets • 4 min read
I just listened to this & took some notes. Allow me to share it in a thread. Worth for all interested in EV, Indonesia, Nickel, China etc. Indonesia now has 55% of global nickel production & home to the world's largest reserves.

Why does this matter? First, what is nickel used for?
Jun 5 • 5 tweets • 2 min read
Good morning Asia!

Instead of a landslide, we got earthquakes, Modi & the BJP got the most seats but much less than they benchmarked (400) & less than 2019 (303) at 240. To govern, they need to work with fickle allies to operate a coalition government.

This will require a much more consensus driven governance. That may be positive or negative depending who u are. Meaning, in the short-term, forming a government takes priority over long-standing reforms that are already politically difficult when they had the government. We may have more fiscal welfares & so if we continue with the same capex, fiscal deficit may widen. Or we may have less capex than before. Irrespective, this area will be watched carefully. Under Modi, grain & fertiliser subsidies remain large & was promised to be in place.

Note that India fiscal deficit has consolidated as of late but remains large. What has changed is the quality - higher tax rev ratios & more capex & less subsidies as share of GDP
May 13 • 4 tweets • 2 min read
This article in the FT doesn't make any sense. The author argues that Modi fails to create job for low-skilled people, esp labor-intensive manufacturing. It also faults Modi for its high-end growth (services, high-tech, infra, etc)

But then it ends with saying, well, don't bother to even develop manufacturing and just work on service exports.

Wait a minute. How is India going to generate jobs? ft.com/content/c4631d… Btw, all the critiques of India makes sense. The issue I have with Rajan and also Congress is their solutions.

They don't have one. Literally. Rajan tells India to forget about trying to do manufacturing & focuses on services.

India exports a lot of services. Manufacturing is the weak spot, not services!!! And if u want a lot of jobs, u need labor-intensive manufacturing.
Apr 19 • 4 tweets • 2 min read
Who likes higher fuel prices in Asia??? Well, no one except Indonesia and Malaysia and by that I mean exporters.

The biggest deficit as a share of GDP goes to Thailand but mostly in LNG. Second is South Korea.

Obvs this is as a share of GDP. Higher fuel costs = higher import costs = someone has to pay for it & eg higher inflation or higher fiscal costs.Image Who likes higher food prices? Well, a few - Thailand, Malaysia, Indonesia, Vietnam and India. Obvs this is EXPORTERS only who gain. EM has high food as a share of consumption basket. But net food exporters have levers to pull. They can BAN exporting of food.

Who is most vulnerable? The Philippines. South Korea imports a lot too.Image
Apr 12 • 8 tweets • 3 min read
Good morning,

Did you know that South Korea exports more to the US now than it does to China?

Actually, it isn't alone. A lot of Asian countries, due to supply chain reshuffling and also geopolitics and industrial policies, are exporting now more to US than China.

Why is South Korea doing more trade with a country far away than a country next door?Image First, growth of exports to the US is faster than exports to China. In fact, China hasn't been importing much more and it is Korea that has been importing more from China for goods such as intermediate goods etc.

This has raised a big concern in Korea that China is a competitor & it's hard for SK to compete with its industrial policy and subsidies.Image
Mar 8 • 18 tweets • 7 min read
Happy International Women's Day! First, I think we should celebrate women everyday (& men). Anyway, here is a thread about women and the labor force participation with a focus on India. Ready? Let's go!

India's Womenomics? Modi’s Decade of Formalisation of Jobs Marches Forward👈 Image By 2030 or roughly the end of Modi's 3rd term should he win, 1 out of 5 working age people will be Indian on earth.

To transform that demographic change into dividend, we need a lot of jobs. For India to grow >7% sustainably, we need to do to have more jobs. Let's talk about it Image
Feb 8 • 26 tweets • 9 min read
Another Five Years of Jokonomics? More Infrastructure, Metals and Mining FDI, and Even Greater Dependency on China

A thread 🧵
Image Indonesia elects a new president in a week. The leading candidate is riding high on Jokonomics, or the continuation of his policy & popularity, as Jokowi's eldest son is VP.

Prabowo promises 8% average GDP growth or Jokonomics. How realistic & what is Jokonomics anyway? Image
Feb 6 • 12 tweets • 2 min read
Indonesia elects a new president next week to replace Jokowi. The leading candidate - Prabowo - is riding the president's coat tail as many hope that he is the best hope for continuation. But what is Jokonomics exactly? From 2014 to 2023, Indonesia grew on average 4.2% per yr👈. If we strip out 2020, which economy contracted, then under Jokowi, the economy grew 4.9% on average (4.2% if we don't strip it out).

So that's sub 5%. In fact, GDP barely deviates from 5% level. So why do people think that Prabowo is the key to escape the middle income trap?
Feb 2 • 8 tweets • 2 min read
Today is 2 Feb and we're basically two years since the Fed started hiking rates in March 2022.

So what you say? Well, since then, Asian FX has lost grounds to the USD, except SGD & HKD.

JPY lost -21.5%
CNH -12.1%
MYR -11.4%
TWD -10.2%
KRW -9.4%
INR -9.2%
AUD -9.1%
IDR -8.7% What we know is that the Fed took rates from 0.25% to 5.5% or +5.25% increase, which is the sharpest since the 1980s of tightening cycle.

On top of this, it also has to wean down its massive balance sheet (BS) by letting 60bn UST & 35bn MBS roll off.

So what? Well, USD rallied.
Dec 21, 2023 • 14 tweets • 5 min read
As we bid adieu to 2023, which was an abysmal economic year for EM Asia (India an exception), hope springs eternal as we look to 2024 with key drags dissipating.

A thread 🧵👈

bloomberg.com/news/videos/20… The great expectations of China lifting the region via imports and tourism disappointed as demand faded, weighed down by property market woes & weak investment.

From Korea to Vietnam, exports to China crashed, dragging down overall shipment, hurting big traders the most. Image
Dec 13, 2023 • 5 tweets • 2 min read
Investors are disappointed by the lack of stimulus to revive the animal spirit.

That is because Chinese data is still good according to the Chinese government. In fact, I imagine they are thinking, "Despite our tightening of real estate, cutting off services, GDP still grows👈" Demand is deflated but supply is ever more growing, as per Caixin services and manufacturing. And let's not forget, GDP in Q3 surprised on the upside. So the economy is doing fine! Too fine for a big stimulus. Of course that is bad news for the financial sector & investors.👈
Dec 8, 2023 • 5 tweets • 2 min read
If you love China and you love Hong Kong, I got a chart you will like & then I got a chart for you.

Okay, here is current valuation (P/E) relative to the past (going back to 2006) & where we sit on the normal distribution curve.

Takeaway? The FLOOR for Chinese stocks is here... Image As in, given that HSI is at 6%, then you can't get hurt falling out of the basement so to speak.

But, but, can we LIFT OFF? Can we?

Somehow markets just keep selling down this already cheapened index. Image
Dec 5, 2023 • 8 tweets • 2 min read
The Chinese economy is both doing fine and doing badly, and it is depending on whose perspective it is.

Take the Caixin PMIs - both manufacturing and services beat expectations (the official one underwhelmed and fell).

So what's going on? Why don't investors like it? First, the November service PMI roared to 51.5 vs 50.4 in October. The manufacturing data was good too.

But, the details for services are horrible. Employment and prices FELL.

If your output expands but your prices fell, it means PROFITABILITY isn't so good.

Supply-side growth
Nov 28, 2023 • 4 tweets • 1 min read
Facts:
*Chinese people live below their means. Their consumption per capita is very low & channel those savings into housing & finance
*Give up their present to have a better future, putting faith in system

Gov allowing big developers to fail didn't lead to SYSTEMIC risks but... The costs of China allowing developers to fail & hasn't led to a banking crisis comes from ORDINARY PEOPLE losing their deposits/savings/giving up their time/life to save up for the future that isn't coming.

So? They STOP consuming so much. STOP investing.

Animal spirit SAPPED.
Nov 27, 2023 • 5 tweets • 1 min read
I don't understand why markets are down because of weak "industrial profits" in China. We know that there is deflation (CPI negative) & hence margin compression given that prices are going lower not higher. If u are a foreign company, earnings are down in USD given weak CNY. Not everything is doing badly in China (almost all sectors except below). Sectors with POSITIVE industrial profit growth:

Electric Machinery and Equipment (Slowing)
Gas (Rising)
Water (Rising)
Tobacco Processing (picking up)
Metals and mining (slowing)

Smoking inelastic?
Nov 23, 2023 • 25 tweets • 8 min read
Our South Korea research note is in November Current Economics if you subscribe. I am bullish South Korea despite its demographic and debt woes. Why you ask? Image First, we all know that South Korea has a Double D problem: yes, a) worsening debt and b) demographic trends. And so it's easy to dismiss it.

But before you lament, remember that the KOSPI is not the Korean economy. It represents Korean big companies whose revenues are GLOBAL.
Oct 11, 2023 • 27 tweets • 7 min read
Good morning,

I have been at a loss to what has happened over the weekend. I am not personally affected at all but the feeling of helplessness crept over.

But this is what I believe: THE END DOES NOT JUSTIFY THE MEANS. This is the fundamental divide of moral vs immoral people. Finally, I have decided to stop reading people emotional responses and anger of what people say & not say etc. We'll leave that for later.

But let's spend this morning reading a few good finance papers shall we.

Not sure if u read this, it's topical 👇: kansascityfed.org/Economic%20Rev…
May 10, 2023 • 9 tweets • 2 min read
Let's talk about details of China trade because China has more than 20% global market share of manufactured goods. China importing less from world.

Exports rose 8.5%YoY in April due to base effects & mostly to global South (EM). Exports to DM tanked. Let's go through details! 🇨🇳 China exports to word by economy year-to-date (US tariffs + sanctions + industrial policy working):

USA 🇺🇸-14.3%
Canada -16.4%
EU -4.3%
Japan 0.8%
South Korea 4.9%
Taiwan -20.1%

ASEAN +15%
Russia +67.2%
Brazil 3.2%
May 9, 2023 • 4 tweets • 1 min read
China imports plummeted in April by -7.9%YoY in USD vs estimates of -0.2% and so far this year China has been a drag to global demand despite expectations of it being a lift.

Btw, 2022 was a really bad year for imports too. China is demanding less from world but EXPORTING more! The China reopening trade is not working regarding China outbound services as well as Chinese demand for goods from the rest of the world.

The is no lift, just drag. Huge drag in April. -7.9%YoY to be precise.

Whoops!