Understanding China's Economic Indicators with Tom Orlik

Understanding China's Economic Indicators with Tom Orlik
Tom Orlik, Chief Asia Economist from Bloomberg & author "Understanding China's Economic Indicators", discussed China's economy and helped us to understand how reliable the economic indicators are.

Tom Orlik, the Chief Asia Economist from Bloomberg and author of the book “Understanding China’s Economic Indicators”, joined us in an interesting conversation in analysing China’s economy and helped us to understand how reliable the economic indicators are. We start from a primer to how one navigate across the aims of the Chinese government with the economy, from the major government agencies, stock exchanges to the Asian Infrastructure Investment Bank (AIIB). We discussed the recent China equities crash dating back from last July with Tom explaining why the Chinese economy is still growing despite of that. Last but not least, we discussed Tom’s book, where he provided insights to how one should read or analyse economic indicators from China and put the whole economic picture of the up and coming largest economy of the world in perspective.

Here are the interesting show notes and links to the discussion (with time-stamps included):

  • Tom Orlik,  (@tomorlik, LinkedInBloomberg), Chief Asia Economist, Bloomberg 
    • How did he get started in your career and move to China? [1:00]
    • From a policy analyst in the British government to your stints in WSJ and Bloomberg, what are the interesting career lessons you have learned? [1:40]
    • What’s your areas of coverage as the Chief Asia Economist of Bloomberg? [2:18]
  • The Chinese Economy & recent equities crash [2:47]
    • For a start, how is the Chinese economy structured?
      • What are the government agencies in China which are equivalent to ministry of trade, the treasury, the monetary authority which governs financial regulation and the securities exchange commission (in the US)? [2:57]
      • Is there a central coordinating committee within China that oversees these economic agencies and who is in control? [4:30]
      • For the Chinese policy makers, what are their aims for the Chinese economy? [5:05]
      • How are the stock exchanges in Greater China structured, for example in Shanghai and Shenzhen? Is the Hong Kong stock exchange a part of that economic structured? A short note on the Hong Kong and Shanghai connect. [5:43]
      • Discussion of the China’s Yuan or Renminbi currency in transition on whether it is under, on par or over-valued. [7:10]
      • Who are the key people in the Chinese economy? Who runs the central bank of China, the securities exchange and the treasury? [8:42]
    • What are the forces & industries that are driving the China’s growth just before the recent equities crash in Jan 2016? [10:02]
    • The China equities crash 2015/2016: When did it start and what really happened? The story of the equities market is more about leverage than about the whole Chinese economy in potential trouble. [12:20]
    • Does the China equities crash has an impact to the rest of the economy? China’s equities market is not as important as compared to their counterparts in Hong Kong, US and UK. [13:52]
    • Who trades in the Chinese stock exchanges? Are they just retail investors or institutional funds? [15:00]
    • How are traditional industries such as banking and real estate affected by the equities crash? Real estate industry actually gains from the equities crash. [15:30]
    • What are the steps taken by the Chinese government to resolve the equities crash? The discussion of China’s circuit breaker approach. [16:22]
    • How do they approach this from their perspective or what’s the thinking behind those steps they have taken? [17:59]
    • Will there be more regulation from the Chinese government to the economy? [19:00]
    • What is China’s interests furthered with the recently formed Asian Infrastructure Investment Bank? [20:00]
  • Understanding China’s Economic Indicators: Translating the Data into Investment Opportunities [20:36]
    • What is the motivation behind writing this book? [20:41]
    • Who are the intended audience behind the book? [21:45]
    • How reliable are the China’s economic statistics? [22:54]
    • How does the book works in terms of explaining an economic indicator?
      • What’s the framework behind each statistic? [26:50]
      • Are the economic indicators focused on its importance, market sensitivity, release time from the Chinese government on the Internet? 
    • Discussion on fixed Asset investment data. [28:10]
    • When we look at these economic indicators, do we get a snapshot of the Chinese economy given that it’s changing so quickly? [29:30]
    • The story of satellite data used as a way to provide an economic indicator or measuring economic activity in China [30:01]
    • Will there be a 2nd edition of the book? [30:43]

Podcast Information:

The show is hosted by Bernard Leong (@bleongcw) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) with their new Aspirus Desk on Indiegogo (Twitter, Facebook, Medium) and Linkcious (and check out their other product, Chiibi). Also check out Ideal Workspace’s new standing desk, Aspirus and sign up for their mailing list.