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Hypothetical China crash

  • #1
  • First Post: Jul 17, 2007 5:56am Jul 17, 2007 5:56am
If China's hot market crashes which currencies would be winners?
There are no certainties only oppurtunities.
  • #2
  • Jul 17, 2007 6:00am Jul 17, 2007 6:00am
none. China's economy very strong. Why do you think it crush?
  • #3
  • Jul 17, 2007 6:09am Jul 17, 2007 6:09am
It could actually crash.

There are too much "borrowers" funding the China economy; should export industry starts to slow down, these borrowers will loose money and eventually cascade into a nationwide crash

should it crash, everyone will suffer.
US has lots of investments in China.
Europe has lots of investments in China
UK has lots of investments in China.
Canada, Australia, Africa sells lots of Raw Materials to China.

But one thing for sure, South East Asian Nations (Philippines, Thailand, Malaysia etc) will thrive - currently, SE Asian nations are export competitors of China.
  • #4
  • Jul 17, 2007 6:10am Jul 17, 2007 6:10am
Quoting USDSEK
If China's hot market crashes which currencies would be winners?
Well, if that happens, there will be some hell notes buying - if you understand the culture there.
  • #5
  • Jul 17, 2007 6:35am Jul 17, 2007 6:35am
It is only hypothetical but I believe it could go very bad in China. Not crash like to a depression but loose more than half of it's stockmarket value.
In this moment they open 300.000 custody accounts every day and have over 100.000 million in use already. In stock theory one of the reasons markets have become so volatile is because private citizens have gained access to the market through internet.
So if it would crash - which currency would gain strenght against others?
I totally agree with Burger, it would hurt a lot of economies but there is always a winner!
There are no certainties only oppurtunities.
  • #6
  • Jul 17, 2007 6:35am Jul 17, 2007 6:35am
Quoting USDSEK
If China's hot market crashes which currencies would be winners?
Answering your question: Go long Yen.

Whether or not, how heavy, when China's hot market's gonna meltdown are other questions you have to consider
  • #7
  • Jul 17, 2007 6:37am Jul 17, 2007 6:37am
Quoting highway
Well, if that happens, there will be some hell notes buying - if you understand the culture there.
you are right, of course
  • #8
  • Jul 17, 2007 6:40am Jul 17, 2007 6:40am
Quoting USDSEK
If China's hot market crashes which currencies would be winners?
Do you mean the Shanghai exchange, or the economy in general? And over what sort of time frames?
A big drop in the SSE might cause a short term strengthening of the yen, but on the whole because it's a very young exchange, with hundreds of thousands of Chinese ready to pour money into into it, as well as many highly sophisticated Western investors (note the Qualified Investor requirements for an outsider to invest directly), as well as the Chinese government's interest in keeping it somewhat sane, I would assume that in the longer run a significant drop would be short-lived, and hence not have a long-term impact on any particular pair.

As for the economy in general - if that crashed, it would be a major destabilizing event; the flight to safety would probably strengthen the euro, chf, and gold.
  • #9
  • Jul 17, 2007 6:55am Jul 17, 2007 6:55am
Hell note-bonds?
There are no certainties only oppurtunities.
  • #10
  • Jul 17, 2007 7:43am Jul 17, 2007 7:43am
Quoting USDSEK
So if it would crash - which currency would gain strenght against others?
Whether the crash is in Europe or Asia, the Swiss framcs is always the the safe haven
  • #11
  • Jul 17, 2007 7:51am Jul 17, 2007 7:51am
China is not considered as Free Market Economy.

All above arguments are based on Free Market Economy.

Therefore N/A
  • #12
  • Jul 17, 2007 8:02am Jul 17, 2007 8:02am
Quoting chenkz
China is not considered as Free Market Economy.

All above arguments are based on Free Market Economy.

Therefore N/A
Mine aren't. While China may not be a free market economy, what happens to it has profound impact on countries that do have such. Therefore "N/A" is N/A
  • #13
  • Jul 17, 2007 8:20am Jul 17, 2007 8:20am
Quoting chenkz
China is not considered as Free Market Economy.

All above arguments are based on Free Market Economy.

Therefore N/A
You have a short memory my friend
  • #14
  • Jul 17, 2007 10:53am Jul 17, 2007 10:53am
Quoting BurgerKing
It could actually crash.

But one thing for sure, South East Asian Nations (Philippines, Thailand, Malaysia etc) will thrive - currently, SE Asian nations are export competitors of China.
I guess none will thrive should the market crash. Coz the globalization rules exempt no one in this game. But this bring me to another puzzle, who & what gain most from this crash scenario? The markets still work on the zero-sum concept I guess...And I also feel any market crash is not an overnite story but a kind of "plan crash", to trigger the panic button that the whole market joint in and give it a real crash? Too many questions are pending for answers but I guess I should remain my position as a trader with simple thoughts...follow the trend...
  • #15
  • Jul 17, 2007 8:39pm Jul 17, 2007 8:39pm
I have some investors from China visiting the last few months back and fort. They are into mining and this group is some sort of "advance" surveyors. (TIP: If you are a stock investor, invest in Mining! My stocks are now 50% profit!)

As we were chatting, they mentioned about the China "new generation" aka Single Child Generation. He described the new generation as spoiled lazy bratz that will not work, play internet games, and live off their parents.

What does this imply of the coming China Economy? Once the hard working middle age population (parents to these single child bratz) stops working (retired or deceased), China will grind to a halt.

China rose to economic superpower because of the Single Child Policy. But it could be their downfall too. (Not because population control is a bad policy though...)
  • #16
  • Jul 17, 2007 9:24pm Jul 17, 2007 9:24pm
Quoting BurgerKing

China rose to economic superpower because of the Single Child Policy. But it could be their downfall too. (Not because population control is a bad policy though...)
I can understand the negative effect of the Single Child Policy. But, I cant get the link to economic superpower. All this while I only link the China booming cause by their more open economy policy and gearing towards the capitalization philosophy. So, maybe you can share further here coz this is an interesting view to me.

Btw, thanks for sharing the tips.
  • #17
  • Jul 18, 2007 2:03am Jul 18, 2007 2:03am
as a Chinese, I just worried the crash of USD. because we have too much this kind of paper.
  • #18
  • Jul 18, 2007 9:09am Jul 18, 2007 9:09am
Quoting TurtleOnion
I can understand the negative effect of the Single Child Policy. But, I cant get the link to economic superpower. All this while I only link the China booming cause by their more open economy policy and gearing towards the capitalization philosophy. So, maybe you can share further here coz this is an interesting view to me.

Btw, thanks for sharing the tips.
With too big a population, more of your funds would be diverted to providing health care/human needs instead of infrustracture.

Compare India and China. China is investing more and more on infrustracture while India is dumping money into "human needs". Guess who is having a better economic success? India had a big early head start but China had easily surpassed them in such a short period. Just compare the transportation, and power infrustratures.

The openness and capitalization is also another big factor. But these wont succeed if you have 8 kids to feed back home. If you dont have excess money, how can you fuel the stock market? how can you open shops? etc..


BTW.. calling the new chinese generation lazy is a bit too harsh.. TOO Choosy is a better term. They dont want to work on jobs that are not "great" unlike the older generation who will work on anything to support the family.
  • #19
  • Jul 18, 2007 9:10am Jul 18, 2007 9:10am
Quoting mduchamp
as a Chinese, I just worried the crash of USD. because we have too much this kind of paper.
I have almost 90% of my money in USD.
Hell I am almost broke on local PHP currency and have to sell USD monthly...

(I converted my savings into USD to trade forex...)
  • #20
  • Jul 18, 2007 9:17am Jul 18, 2007 9:17am
Quoting mduchamp
as a Chinese, I just worried the crash of USD. because we have too much this kind of paper.
Lol - the irony of it all is that it was the Chinese who invented paper currency
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