Hello everyone, I am the host Chen Yanchun. Welcome to listen to Cai Cai. I know that the topic I am talking to you about today is very interesting. It is about China’s unemployment relief and low price rush to impact the global market. Today I will share it with you in two parts. The first part is the competition between the United States and China. Xi Jinping’s 3 Major Countermeasures to Save Himself Part 2: Price-cutting competition and dumping of the global industry . What kind of difficulties will Taiwan’s industry face ? Listeners and viewers who want to know, please remember to read to the end. Today’s guest is Chen Yajie, deputy editor-in-chief of Financial Information Biweekly. Welcome Yajie, hello, everyone. My name is Chen Yajie. Today’s focus is on communication industry , because the development of China’s industry is almost closely related to Taiwan’s communication industry. I would like to do some popular science for everyone before the program starts, and let everyone know quickly what is happening in China now. What kind of problems is the economy facing? You are welcome to join the financial news channel. Membership supports the financial media that understands the most investment. Follow us to track political and economic trends and industrial conditions. Become a financial news fan group , which is a member of the consortium . Or you can also target Favorite programs donate , so that we can continue to bring you more exciting programs. Everyone has heard that China’s economic recovery after the epidemic has not been as good as expected for some time , but this time we will especially present China’s current situation . In fact, the reason why we discuss this situation is because some indicators have really emerged in some recent statistics. Yes, we understand the performance of China's economy from three figures . In the past, the first one was China, which has always been very good. It's true that it relies on foreign investment. But by 2023 , which is the third quarter of this year, it will see a net outflow of foreign capital for the first time . This is very important. Since China's reform and opening up, foreign resources have been flowing into China in an endless stream . Money only wants to The method was to move in. Later, money started to come out , and this time it really came out (money) was more than what went in. What about the second one? In addition to the investment side, foreign capital began to withdraw. In fact, part of the foreign capital in the stock market Oversold amounts have also begun to hit new highs . This is also very important. The capital market is a country's vitality and an important indicator of the economy. It means that their stock markets have also begun to experience capital outflows. And the third one is what we know about it. One of the changes in the economy that is actually very important is its import and export figures . Because China is also a very important trading country , its import and export are now declining simultaneously. I believe that Taiwanese factories should be aware of this , or many investors or viewers. Anyone who has been paying attention to financial news for a long time must know that in fact, China’s economy is currently facing a very serious problem of export recession. So these three economic problems basically highlight the difficulties that China is facing now. So next we want to know about it . How does Xi Jinping, the president of this country, deal with such a thing ? I think there is a very important point : when we understand a company, we must understand what the boss of the company is thinking. So we need to understand how China is doing. To rescue the market, we need to understand what Xi Jinping is thinking and what his strategy is . In fact, our analysis this time is very clear, that is, he has at least three policy directions that do not seem to change in the short term. This matter is very important and affects many people. Because now we know that after the fundamentals of China's overall economy have changed, we now see that the financial side has had a relevant effect. Of course, Xi Jinping cannot sit back and ignore his basic attitude towards governing the country. It is true that he still has to take into account some of his domestic situations , so the first one is to consolidate his internal circulation. So now basically what we see is that the import and export trade has begun to decline. So whether it is financial flow or logistics, If the impact is huge , then he must let these industries continue to flourish. If they can continue to flourish, he will have to rely on his huge domestic demand market, so he has now begun to direct the energy of his industry back to the country. So it is a situation of entering an internal economic cycle. This is the first point , and the second point is what we have seen a lot in the past few years. We can say that this is a socialist ideal idea , which is to redistribute society, that is, the rich. You can't make so much, you have to distribute it to the weaker ones, and you have to help the weak and the poor. So in this case, the concept of common prosperity is very important to Xi Jinping , so we see that it has been part of China's debt in the past. Both the central and local governments have hit new highs , so the government must have run out of money , so it needs to ask companies to cough up the money. So we have seen that whether it is Tencent, Alibaba , or some other relatively large private companies, in the past Being asked to donate a considerable amount of money to the national treasury , we know that this situation is definitely not limited to their own companies , but all companies of a certain scale in their country may encounter common prosperity in the future. Such a big hat is put on your head. I think we can share this thing a little bit , because in fact, many Taiwanese manufacturers have invested in and set up factories in China. Recently, they often receive a lot of concerned calls or inquiries, so you guys How is the company doing? How is the sewage discharge situation? I have expressed concern for your operations with similar euphemisms . I say this to express concern and help you solve the problem. But I think this matter represents the investment environment of the entire Taiwanese factory in China. The challenges will become bigger and bigger , and there will be more and more obstacles. Of course, let alone that. Recently, everyone knows that the tax audit has been traced to Foxconn , but it seems that the amount is lower than expected, but it does not mean that this matter is over . And I think that for other foreign investments For manufacturers, there is a chilling effect, that is to say, they are also afraid that if you do not do such things regularly, it may cause great risks to my business, so mutual prosperity is one of his coping methods. Is that okay? One very important thing is that what happened after he came up is called National Advancement and Private Retirement. I believe it is also very familiar to many Taiwanese businessmen. Suddenly, in my company, a national-level enterprise came to take shares , and then it became... Even when Taiwanese businessmen become major shareholders , there are many examples of this , and even the management control of the entire enterprise is lost. For China, especially for a person with a ruling ideology like Xi Jinping, he I think this is the best way for him to directly control enterprises and the economy . Xi Jinping is very fond of manufacturing. He doesn't like finance or technology networks . I think he should think that if you want employment , you must manufacture . I feel like everyone can have enough to eat in this manufacturing industry , and if it is new technology or finance, a few people may become rich. Right, so I think this is a big difference in the route, but he just increased the manufacturing industry. Is the investment intensity correct? So what we see now is that the ratio of manufacturing to fixed asset investment in China has grown by about 10 percentage points in 5 years. Then in 2023, it will be the first three quarters of this year. The manufacturing industry accounts for more than half to 52.5% . And in fact, China's current bank loans are obviously tending to the industrial manufacturing industry, which can get more subsidies and relatively loose financing, etc. It is said that Xi Jinping prefers to support the manufacturing industry . Because it is his basic belief to take good care of migrant workers, the manufacturing industry has gained a relatively large advantage in this . In fact, China has been a big manufacturing country in the past. Now China's domestic demand is frozen and exports are not good, but the manufacturing industry is desperately investing in expanding factories. I think it may be the beginning of a nightmare for the world. Our financial news has reminded many investors, readers or viewers many times that in fact When China puts all its efforts into developing certain industries, that industry may face serious problems of oversupply . Now, China as a whole is putting all its efforts into increasing investment in this manufacturing industry. Which industries are the focus of its increased investment ? What kind of impact will this global industrial environment have on China? We know that it is hard to talk about other things , but it must be in large quantities and the price can be very cheap. According to a study by a foreign bank , it was found that China’s export products It has dropped by about 20% this year. In a world with inflation, everyone will think that low-priced products are coming from China again. This may be good news for end consumers , but in fact it is for other international manufacturers. It ’s a nightmare with great pressure and great pressure . For example, in the first 10 months, exports of electric vehicles like theirs have grown by almost 80% to 77.9% , which is very high . It’s very scary. So you know it only needs In the name of being cheap, it will be OK in any market, that is, someone must pay for it, unless it is the local government that wants to take action, that is, to see if it wants to block something. For example, the United States has started to tax steel . In addition, Europe has also begun to impose sanctions on electric vehicles . I think the key is that China relies on subsidies to make prices so cheap rather than a free market mechanism that will allow everyone to do this. It feels like a headache , and it smells like dumping, so everyone is starting now. In order to protect your own domestic industry, you will start to think of ways to stop China's dumping problem. Among the statistics we have seen so far, some of the more obvious ones are China. Excess products include, for example, batteries. We know that it is a big country in the battery industry. Chengdu has 70% of them . Then there are also chemicals and some machinery and equipment. China now produces excess products domestically . These products are exported to the international market. Among them , especially Taiwanese businessmen , for example, we know plasticization, machinery, steel industry , optics, we know solar panels, etc. , have been greatly impacted, yes, so in this part we will enter the second part. The first part is when China's products compete with each other at low prices and are dumped around the world, what should the Taiwanese manufacturers do ? Let's first talk about some of the obvious things. The first one is plasticization. I think it is really representative. Like our Formosa Plastics Four Treasures, it used to be everyone's favorite stock. But in fact , the performance of Formosa Plastics Four Treasures this year is not good, which means it is obviously weak . The main reason is because of China . What they have been promoting since 2019 is the integration of refining and chemicals. Their industrial policy includes a large amount of support for petrochemical production capacity. Once this kind of production capacity becomes excessive, it must begin to be dumped overseas. That’s right . But this will disrupt the price of all countries that need to import ethylene . In fact, according to our statistics this time, if China's ethylene plant is expanded in the future and it is put into operation, it will be the world's largest ethylene producer. This is a very astonishing number . I think in fact, in the past, everyone talked about our Formosa Plastics Four Treasures because we have six light and are very competitive. Plastics is an industrial recycling stock. People would think that (the stock price) goes up and down all of a sudden . It was less at once , but in short it looked good. But that day, Wang Wenyuan, the president of Formosa Plastics Group, said that the cycle of this industrial cycle will be lengthened because of China or because of man-made factors such as the US-China trade. Looking back, we need to rethink how I should look at such industrial cyclical stocks. It may become different. In fact, the same example also happened in the steel industry, and the same is true for the steel industry. They are also because of this cycle. China has been continuously expanding its production capacity since the 21st century , and when the steel market is good, there will be many strange small steel mills popping up on their own, and the products they produce are of poor quality or whatever . In short, when the market is good, they have the opportunity to make money , so everyone comes out to do it. Once the market goes down, they start dumping abroad and disrupt the market around the world. Taiwan's steel plants are actually directly affected by China's The local market prices have little impact , but the problem is that after they spill over to the international market, the entire international market is actually pulled down, so our Sinosteel may not be as miserable as the Formosa Plastics Four Treasures . I still remember that it seemed like In 2021, Sinosteel's profits were very good. In one year, it set the best operating record in the 50 years since its establishment. It was an era of excess profits. So this time, I think the next title of Yajie is very interesting. It is called excess profits. The profit era ended prematurely because of China's dumping and price-cutting competition . Actually, I think if we go back to earlier times, as soon as China exported steel, everyone was afraid, and it was about to begin when the export volume increased sharply. All steel plants We have to start preparing for winter. This year is the same situation that has started to happen again. So it was a very good time 2 years ago . It was a very good time for the steel industry because the epidemic had just ended at that time and there were many problems. Domestic demand or infrastructure-related policies are what everyone is looking forward to , so everyone thinks that the era of excess profits for steel mills has come. However, it has only come for more than a year, and the cycle is very fast. Maybe the good times are over all of a sudden . The fluctuation range becomes very large and the cycle becomes very short. If you understand well, in addition to plasticized steel, I think automobiles are also worth observing. Although Taiwan does not export complete vehicles , the automobile supply chain of Taiwanese manufacturers is actually quite complete. And we In fact, there are many parts manufacturers in the automotive supply chain. They all either have factories in China or have a high proportion of business in China . Especially in the past, most of the partners that Taiwan has cooperated with in parts factories in the past. They are joint venture car companies, which are Sino-foreign joint venture car companies. However, as we just mentioned, China is supporting local industrial chains and local enterprises. In fact, their independent brands of cars are now relatively strong. For example, BYD has become a component manufacturer that has long-term cooperation with joint ventures in the past . It will become more difficult in this wave. And I think it is worth reminding everyone because China is also actively cultivating itself . component suppliers , so how many advantages do Taiwanese factories still have ? Even if you are a Taiwanese factory setting up factories in China, you may be replaced by Chinese companies. This may happen slowly. I think it is worth continuing to observe. In addition , I think Taiwanese people are also very concerned about the semiconductor industry . In fact, although China 's high-tech advanced technology has been sanctioned by the United States this time , they actually spend a lot of effort and money to expand their investment in mature processes. According to the statistics of my colleagues here , there are currently about 22 mature process factories being built here in China , and there will be 32 by 2024. In other words, they are really aggressively expanding the production capacity of mature processes , but it is for Some relatively basic applications are still very important , so it is now equivalent to turning a mature process into a production capacity application like traditional products and a market operation method . So in fact, this is the same as operating a mature process in Taiwan. For this wafer manufacturer, I think it will bring some pressure, so I think investors can also observe whether these manufacturers have any other transformation or niche markets that can develop , otherwise they will also face China. I think the low-price competition is very noteworthy. Especially this time we mentioned that Manduo Chuan was the stock deposit target of many investors in the past. So when the whole of China is disrupting the market order in the process of price-cutting competition, Afterwards, you may want to rethink how to adjust your stock holdings to achieve a better capital utilization effect. In fact, during our discussion this time, we actually gave some suggestions to investors later, that is , if you are not a stock depositor today , how can I seek good fortune and avoid disaster? Let us give our investors some suggestions. We have summarized them. One of the simplest conclusions is that you have to invest in things that are not available in China , because if they are available in China , they are likely to be subject to price fluctuations , and the other thing is that you have to avoid products that China will cut prices to compete with. When you choose investment targets in Taiwan, I think the same applies to European and American stocks . Even Japanese stocks follow the same logic. I think Taiwan’s industries are very diversified , and because Taiwan’s companies are very flexible , we actually have There are actually many niche companies that are doing very well and are worthy of everyone’s development and exploration. Next, let’s reply to what the consortium said in episode 163 of Listening to Caizhizhi. It took 30 years for the consortium to develop the last piece of the puzzle of the Taipei Science and Technology Corridor. Let me read the message in the Di Da Fan Shen Foundation No. 1. Jack Q Chang. I don’t know who is buying a square meter in Beishi. The starting price is 1 million. It’s really a rich person. PR99 is correct , but it’s hard to find one under 1 million in Taipei City now. I think for new construction projects, even though ordinary people like us think this 1 million is really scary , I still can't help but wonder if Taiwanese people are really rich and there are many people who can set the price like this. Now that I have digested it, this matter is really not simple. Then please ask Yajie to read it. This is Consortium No. 2 Nina. She said that the last vast pure land is obviously the Guandu Plain. I think we can continue to observe because this is originally Beishike. It is part of the Guandu Plains Project. We can continue to help readers track whether there are any new development plans in the future . Thank you for listening to today's program and thank you Yajie for sharing. If you like the content of the financial news and are willing to support us, welcome to join . Channel members of Cai Xun become a member of the consortium. After listening to Cai News, we will know that we will see you next time bye bye
