Chinese Stock Market: Real Estate, Semiconductors, and Economic Outlook

Despite the falling stock market, Eugene started investing in China due to sector resilience and government support.

### Chinese Market Insights: Real Estate, AI, and China-Australia Relations
* 🏠 Real estate prices in China have been declining, with the manufacturing sector and real estate investment showing **sluggish performance**. Housing prices are gradually falling, leading to **growing pessimism**.
* 💸 Despite concerns that the **3.2% year-on-year growth in China's retail sales in May** is lower than pre-pandemic levels, the market expects the Chinese government's **stimulus measures to continue**.
* 🇨🇳 The newly appointed chairman of the China Securities Regulatory Commission, Wu Xing, is expected to hold a briefing on the Chinese stock market, which has been **facing challenges**.
* 📉 Short selling in the Chinese mainland stock market has decreased by **80% since its peak in September 2021**, but concerns remain due to the **$33.6 billion short selling balance**.
* 🚗 China has announced plans to impose tariffs on European electric car batteries, with a vote on the **actual implementation** scheduled for November.
* 🤖 There is speculation that the Chinese government will shift its focus from real estate to supporting sectors like **semiconductors and AI**.
* 🇦🇺 Despite the recent thaw in relations between China and Australia, the Australian government is maintaining a **cautious stance**.
* 📈 Chinese investors should consider investing in sectors that can continue to grow even if real estate prices fall, as real estate and financial markets in China are closely linked.

Hello, everyone. This is Eugene, a quantifier of individual failures. Yes, hello, this is Sangji, a protractor. Today, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is falling, I started investing in China. Yes, I mentioned earlier that even though the stock market is

Because we didn't have the morning broadcast yesterday, we tend to forget a lot in a fairly short period of time. Oh, it's no joke. It's really unfortunate. There's a rumor that when going on a trip to Japan the next day, you didn't bring your passport. Is it true? Korea is a great country. I emphasize that again. When people come back from overseas, it's a relief to see them. Oh, you didn't bring your passport, but you can easily get a new one. Oh, the next trip is to Mongolia, right? Oh, you have to get a new passport again. You lost it, so you have to get a new one. Mr. Kim Dantae, who is going together, is our senior who is very helpful. We ask for your support. In the case of China, the situation continues to be unstable. Yes, some sectors have rebounded a bit as you make a comeback.

Still, it doesn't seem like all sectors are heading downhill now. Especially in Hong Kong, sectors such as big tech, real estate developers, and the biotech sector are still flowing steadily. For example, as I mentioned on yesterday's broadcast, even the composite index was on the verge of breaking 3,000 points. So, I think we need to take a look at the index first and talk about today's market. The composite index rose by about 0.5% today, rebounding to 3,030 points just before breaking 3,000 points. The rest of the numbers also showed a similar pattern, with increases of around 0.4% to 3%. However, the Hang Seng Tech Index continued to decline by 0.3%, breaking the 3,700-point mark. The HG Index also closed today at around 3,705 to 7,000 points, showing a slight consolidation.

Just yesterday, there are signs of a slight downturn again. The trading volume is about 0.7 seconds compared to the mainland's trading volume, so it will take some time for the market to recover. However, because the overall market is a bit weak, various rumors are circulating. Recently, short selling in the Chinese mainland stock market has surged again. Such stories are emerging, but the China Securities Regulatory Commission has clarified that these are groundless rumors. As of last Friday, Goldman Sachs reported that the short selling balance in the mainland China market is about 33.6 billion yuan, which is roughly equivalent to around 6 trillion won. The Chinese stock market is not significantly affected by this. In fact, short selling is not as active here as in Hong Kong, where it is more freely allowed.

Because of this, yes, short selling is not activated, but anyway, there is still a balance of about 33.6 billion won left, so this is the lowest in the recent four years. In September 2021, short selling in mainland China was likely at its highest, but compared to that time, it has decreased by 80%. Anyway, the Chinese securities regulator, um, the authorities in China made many efforts to support the Chinese stock market. The newly appointed savior is Wu Xing, the chairman of the China Securities Regulatory Commission. He will make a briefing tomorrow regarding the Chinese stock market. There were some discussions about this. The exchange rate of the Chinese yuan against the dollar is 7.27, and the onshore yuan exchange rate is 7.255. It is almost at its lowest point against the dollar. Last year, when the yuan was weakest, it was around 7.3. So, in the end, this is.

Given the situation until just before, various news has been coming out recently, such as the Euro and the Yen, causing a bit of a sharp decline. We need to continue to monitor how much the Chinese Yuan will hold up. Yes, it won't be easy, right? Yes, due to various factors, it's an inevitable situation that the Yuan moves in line with other currencies. Among the three countries of Korea, China, and Japan, the Yuan is relatively holding up well. Due to the managed currency system, it could be more stable. For example, I mentioned the economic indicators for China in May yesterday. I have some prepared data on that. If you could bring it up... Just a moment. Oh, yes, here it is. Yes, yes. Well, for now, it seems unclear. Uh, there were many people who couldn't see the answer to that. Especially, when it comes to May production...

The situation is a bit weaker than the market expected, and the manufacturing sector is somewhat sluggish. Real estate investment is also showing a negative trend with a continuous decline in the -10% range. Especially, real estate developers are now facing difficulties in selling properties. These factors continue to have a negative impact on the real estate market. Housing prices from metropolitan areas to third-tier cities are gradually declining each month, leading to a growing sense of pessimism. Compared to the previous month, it increased by 0.7%, which is the largest in the past decade. Articles have reported that there are no signs of prices going down. Yesterday, China's retail sales in May actually grew by about 3.2% compared to May last year, outperforming market expectations. Nevertheless, what...

There were some parts where they said it doesn't make sense that the growth rate is 3.2% now, when even before Corona, actual consumption always grew by more than 10% yy. It was mentioned that if consumer spending recovers, there may be concerns in the market that the Chinese government's stimulus may weaken. Personally, I strongly agree with this point. If China's economy recovers and inflation rises rapidly, I think there is a sufficient possibility that the Chinese government will promptly tighten the measures they have relaxed so far. However, I don't think it's time to worry about this yet. At least by the second half of this year, when the US raises interest rates and everyone laughs together, then it might be a concern.

I think it's okay to worry about it. Anyway, I think I need to check. Have you heard about the inflation outlook from President Lee Chang-yong today? Oh, I didn't hear about it. Yes, and in the morning, did you happen to see the article on housing prices on Economy Trading Economy? When you look at housing prices in Trading Economy, if you look at it in detail, they haven't dropped as much as you might think. Sorry to say this, but that's what it seems like. So, shall we take a look at that screen again since the Chinese market has closed? Normally, in recent times, it has been dropping consistently month over month or year over year, to a certain extent. That graph could show figures like 0.8, 1.6 decreasing gradually and then increasing to 2.4, 3.2, and now reaching around 4.0, nearly 3.9 points.

It dropped a lot, so it looks like it dropped a lot. If you look at this in a five-year perspective, it dropped a lot right now. The reference point is when the price rises from above 0 points. In this picture, you can see that the left side is where the price rose, and the right side is where the price is now falling. So, if you look at it in a longer term, the place where the house price dropped the most was on the left side in 2015. At that time, it dropped a lot, causing a huge uproar. After everything was released, if you look at the right side, you will see that the house prices are showing a 12% increase compared to the previous year, indicating an upward trend. Now, the current chaotic situation is actually the aftermath of that time. However, if you look at it now, it's falling, but it has only dropped for about 2 years. And of course, the width on the right side is larger than the width on the left side.

Because the price is dropping from a high state, the width is clearly large. Compared to the recent increase, it has only been two years, so I have some thoughts. Therefore, I need to think more about how to solve this and how to interpret it well. Actually, looking at the data released yesterday, I didn't think that the real estate prices and transactions in China would rebound significantly. Even looking at the data released until yesterday, I also think it might be a bit of a stretch. So, now I need to think a bit more about how I, as an investor, can make money through the Chinese financial market. It seems necessary to rethink the relationship between real estate and the Chinese financial market.

There have been parts that I have been mentioning to you until now. Just as the Chinese economy and stock market are, if there is no recovery in China's real estate, there is no way out. Now, Angdo-nim, you also always say that, right? But I found an article that can touch on these parts a bit, so I brought it. Hong Haowu, from the China hedge fund GrowIn Invest, wrote an article recently. It has very similar opinions to Angdo-nim's, so let me introduce it to you. According to Hong Haowu, the possibility of a bull market in China is possible even without a recovery in the real estate market. As real estate prices fall, the budget that can be spent in stores can increase, leading to an expansion of consumption. Of course, there may be many opposing views. What do you think? I'm not sure about the expansion of consumption happening, and the more prices fall, the more consumption expands. What does that mean for all new things?

Newcomers may think that way, but for those burdened with debt, it may not be the case. Ultimately, among the entire population, those holding debt related to real estate, how much of a percentage are they? Oh, those who are struggling with their livelihoods should be excluded first in the calculation. Those who live day by day, they should be excluded. The market always excludes those people. Then, among the rest, those who can afford to live, what is the ratio of their debt? Because now, the interest is money going out. No matter how much you lower the interest rate, if the interest money goes out, there is no money to spend. Consumption increases. As house prices fall, consumption increases. Oh, why is that? Because without the connection, it happens like that. Oh, since real estate doesn't work, I need to invest and go all in. That's what the Chinese government wants.

So, by doing that, now you would like to open up a new world with renewed energy. However, the statement itself is not wrong, but it is correct if the proportion of people doing real estate is high. So, what I don't understand is, how many people are currently doing real estate? So, yes, I understand what you're saying quite well, but there could be a strong counterargument that you are looking too far ahead just because of real estate. However, we don't know when the day will come when the real estate downturn will lead to an expansion of consumption, but anyway, if we think that day will come, then the current situation might be the biggest hurdle, isn't it? I'm not sure when that day will come, but I think that if we can overcome this hurdle well, that moment will surely come. So, at least for now, I'm not too absorbed in the Chinese real estate issue.

It is necessary to think a bit about leaving the stock market altogether, like researcher Ma Wo-i mentioned. Right now, it's difficult to say that China's real estate and financial markets are completely unrelated to the economy and will separate and go their own ways. Yes, it's hard to say that, but there will come a time when such a point could sufficiently arrive. You might need to consider this to some extent. Currently, the size of the stock market in the U.S. is much larger compared to GDP. The second country now is China, but the size of the stock market compared to GDP is not that big. However, as financial markets develop more, the size of the stock market and financial market relative to GDP will significantly increase. But looking at China's current behavior, it seems that's what they want. It's clear. So, it's right to grow it that way.

The problem is that the accident recovery is not going well right now, so pressing this button here is not responding properly. This side is breaking down now, like Japan did, and this real estate debt issue is increasing a lot. The United States, which always had problems, also did the same. Yes, that's why I introduced the article that Hong Ha mentioned. Anyway, there are people who think about this real estate and financial market economy in this way. In particular, in the case of Hong Hwa, in 2015, China had a bubble. They accurately predicted the drop from the peak of that bubble, and last year, with the corona in 2022, China suddenly reopened after the Party Congress in October, and the market showed a significant rebound. Even that rebound was a case where the prophecy was made.

Because it's based on analysis, well, of course, simply put, the article content came out a bit brief, so I'm introducing that part, but I think there could have been more thoughts from this person. So, in the end, if the percentage of people without homes is high, this statement is correct. Many people without homes are actually involved in real estate. In reality, when the price of assets falls, interest wanes. Interest arises when the price goes up. It's a special point. When the price drops, it's cheap, so should I buy it? If electric cars are cheap, should I buy one? It's like this. In the real estate and stock markets, assets with volatility. If they fall, it seems like they will continue to fall, so people lose interest. If they rise, it seems like they will continue to rise, so interest grows. Even if it's expensive, that's why there's clearly a difference. If there are many people who do not own real estate, the price of houses

If it drops, then for those who do not own real estate like me, I don't even think about owning a stake now. I want to do stocks. Since stocks seem to be good, if that's the case, it fits perfectly with this guy. I mentioned that investors should think more about sectors where my stocks can rise even if real estate prices in China and Korea fall. Recently, semiconductors surged yesterday, and today, the AI sector surged. So, China has done all the real estate stimulus it can for now. If you look at it now, almost all cities in China, except for Gwangju, have abolished loan-to-value ratios and mortgage rates, so additional stimulus measures will be introduced here.

The things that are not worth it are actually situations that are not correct, and I believe that rather than pushing for the Chinese government and real estate support next, what the Chinese government really wants to do next is perhaps support for semiconductors and AI. I have been mentioning these points continuously. However, in fact, yesterday it was about semiconductors, and today it's about real estate, AI. If you look at it, AI has risen a lot today, right? On a day like today, where the prices have risen a lot, it may seem a bit concerning to mention the sectors that have gone up on this show. Of course, I believe that investors or our subscribers will take it as a reference, but I think there is a need to be careful when talking about sectors that have surged on a day of sharp rise. We don't know if these sectors are at their peak right now.

As the market's interest grows, it is natural that volatility increases in proportion to that. So, as we return to the market today, we once again ask you to reconsider the nature of our broadcast and take a look at it again. Yes, yes. And now, regarding the electric vehicle tariffs, China has been hit hard by Europe. However, China is now starting to retaliate. There were news reports that anti-dumping investigations have begun on imports of European pork over the past year. China imported about $3.3 billion worth of pork from Europe, based on a standard of 4.5 trillion won. Researcher, I saw your report on this, but the anti-dumping investigation period has been extended from 1 year to a maximum of 6 months, totaling up to 1 year and 6 months. They have set a very long period for this. Regarding this, the Chinese government is also seeing an increase in pork prices domestically.

They are a little concerned about these things, and they want to continue the dialogue with Europe. Although they have made this announcement about the anti-dumping, they mentioned that these concerns are reflected in the content that has now been revealed. They notified the electric car battery tariff rate last week, which is scheduled to be implemented from July 4th. However, it is still a tentative conclusion, so the decision on whether to impose the actual tax will be voted on in November. This vote must pass to impose the tax. Therefore, the executive branch has recently become more cautious, even raising concerns in France. Regarding how to address these issues with China, it seems that more time is needed to consider it. I thought that more time should be given to observe this. Prime Minister Lee Chang is probably until today.

I heard that you are planning to visit Australia, but last year the education between Australia and China amounted to 1.5 trillion yuan, yes, 2 yuan. Now, this has increased by over 30% for the year 2019. Recently, the import of Australian wine to China has been increasing significantly, and Chinese people are visiting Australia a lot. Yes, Australia is the fifth most visited overseas destination by Chinese people. There were speculations that Australia would become closer to China when the Labor Party took over in 2022, but for now, they are keeping a distance from China for a bit longer. However, recently, there have been evaluations that Australia has started to reach out to China economically. Yes, it is known that China took the initiative in thawing the relationship between the two countries, but anyway, yes, there are assessments that the Australian government has started to hold hands with the hands that China is extending. Yes, according to China's official media Global Times, the relationship between China and Australia has finally returned to normal after many ups and downs. They fought a lot, they fought a lot, but now it's different.

Not only Australia, but now there are some talks about the possibility of improving relations with countries that have been somewhat desired, including Europe. In particular, there have been discussions about China changing its approach. In the past, China mainly pursued a strong diplomacy through hardline diplomacy, but it seems that this approach has been almost abandoned. Therefore, there are talks about China trying to seek reconciliation once again. The image of China until last year, which was quite confrontational, seems to be changing. Therefore, it would be good to take a closer look at how these things will affect the financial market. That's all for today's news. The market is a bit sluggish, and economic indicators are being announced somewhat ambiguously. As a result, investor sentiment is not greatly.

Okay, personally, I have been under a lot of stress in terms of profit defense since last May when the sun set, but this week, I personally found a lot of stability. I think I've gained some sense of the market and such rather than a sharp increase in profitability. Anyway, from the perspective of Chinese investors, even if it's the Chinese stock market, there are sectors that are marginalized, and even amidst increasing market volatility, there are sectors that show resilience. This is also a characteristic of the Chinese mainland. Yes, such sectors often experience cyclical selling. So, even in the face of a prevailing trend, please don't be too distressed. If you are interested in the Chinese stock market, I hope you can overcome difficulties with our Chinese closing angle TV along with the Chinese closing. That's all for today.

I will also greet Gakdogi tomorrow. Thank you. Bye.

[중국 주식시장] 어제는 반도체, 오늘은 AI, 내일은?!

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Wu Xing's Efforts to Stabilize the Chinese Stock Market

Despite the stock market's fall, there is a rebound in some sectors, especially in Hong Kong.

The Chinese Securities Regulatory Commission has denied the groundless rumors of surging short selling, making efforts to support the stock market.

The newly appointed chairman, Wu Xing, is set to brief about the Chinese stock market, as the yuan reaches its lowest point against the dollar.

The Current State of the Chinese Yuan and Real Estate Market

The Chinese Yuan is experiencing a slight decline, but is relatively stable compared to the Euro and Yen, possibly due to a managed currency system.

The real estate market in China is facing a negative trend, with declining housing prices across metropolitan areas and third-tier cities, leading to growing pessimism.

Despite this, retail sales in May have grown by 3.

2% from last year, outperforming expectations, but there are concerns about the sustainability of this growth and the potential for government intervention in response to rapid recovery and inflation.

The Impact of Real Estate Prices on the Chinese Financial Market

Real estate prices in China dropped significantly in 2015, causing a major uproar, but have been falling for the past 2 years.

Despite the current downward trend, there is a prediction of a possible bull market in China, leading to an expansion of consumption as real estate prices fall, according to Hong Haowu from the China hedge fund GrowIn Invest.

This prediction is met with skepticism, as the impact of real estate debt on the population's ability to increase consumption is questioned, ultimately influencing the Chinese government's desire to encourage investment in the midst of real estate market challenges.

The size of China's real estate and financial markets is growing in relation to GDP, which could have a significant impact on the economy.

The behavior of these markets influences people's interest and investment decisions based on asset prices.

The fluctuation of asset prices affects the level of interest and involvement in real estate and stock markets.

Market Analysis: Real Estate, Semiconductors, AI, and Chinese-EU Trade Relations

Real estate stimulus measures in China are being reduced, leading to a surge in the semiconductor and AI sectors.

There are concerns about discussing sectors that have surged on a day of sharp rise, as their peak is uncertain.

China is extending the anti-dumping investigation period for European pork and is cautious about the dialogue with Europe, while the decision on electric car battery tariffs is still pending until a vote in November.

The Evolving Relationship Between Australia and China

The education exchange between Australia and China saw a significant increase of over 30% in 2019, reaching 1.

Australia has been experiencing a growing import of Chinese wine and has become the fifth most visited overseas destination for Chinese people.

There are speculations about Australia's shifting relationship with China, as they are now starting to reach out economically, and there are talks of improved relations with Europe.