4Cs: China, Commodities, Currencies, Correction -- ATCA Open and Philanthropia Socratic Dialogue

1. China

What is China; what is the Chinese market? Does re-adjustment matter?

Yes, Chinese market is one of the most dynamic markets over the world, predictions are usually like gambling, because there are so many influctuation and re-adjustment - a youth's future is unpredictable.

The model of "borrowing money for consumption" may not be the philosophy for current Chinese people; high saving rate may off-set a lot of consuming powers in the domestic market. I just assumed this is one key reason why does Chinese government and people are focusing more on export to drive the economy growth. This phenomena wont be changed very soon, thus to continue the economy growth in the slowdown period, fiscal policy will take the most important role - government investment into infrastrcuture development, however, the expected result is domestic marketing booming.

I think the people in China or overseas don't need to worry about China's economic and political re-adjustment, because recent years development has demonstrated that the government and the enterprises have found the right directions most of the time; the re-adjustment should promote the Chinese economy to a better situation.

2. Commodities

The international commodity market is more divese than Chinese ecnomy, since the investors in this area have no consistent strategies. The fluctuation of international commodities has caused and will cause a lot of uncertainty to Chinese economy. It seems that the commodity market has been managed by some finance giants rather than the market itself.

The greatest challenge derived from commodities' market is China's pricing structure for some specific products - oil, gas, electricity and etc., which have strong impact on demostic market related to CPI, PPI. - it's a key index to indicate people's living quality.

3. Currencies

Many people feel nervous about China's USD assests and RMB's appreciation.

a. China has changed its foreign currencies' portfolio, which has reduced the percentage of USD assests;

b. For a country like China, the analysis of foreign assests shouldn't be the same as for a company, since China must hold enough/a reasonable amount of USD assest for many kinds of reasons, furthermore, USD won't be always weak as today.

c. China's development needs RMB's appreciation, otherwise, China may suffer a great CPI increase. Chinese people need to be more rich aline with Chinese economy growth; Chinese people/professionals need to get an international income standard. There are two ways to ahieve that: one is to add Chinese workers's salary annually with a rapid growth; the other one is RMB's appreciation.

Cost advantage shouldn't be an advantage forever, otherwise, China is "poor" forever and other "third world countries" won't find their future.

4. Correction

In my opinion, China's industrial innovation & upgrade and finance system development are the critical factors in the coming years.

"Correction." What's that? Beside the reduction of interest rate, Chinese market needs a more comprehensive finance product-mix.

I believe that there is a great market potential for finance service in China.