Oct 26 (Reuters) - While global tech stocks teeter, in China they have already crashed as lofty valuations collapse under worries about AI demand and curbs on Chinese exports.
The meltdown, tanking the mainland STAR50 index (.STAR50), of AI and semiconductor leaders by 40% in less than four months and vaporising some $480 billion in market value, is an ill omen for wobbly world markets and a dampener on China's efforts at encouraging its savers into stocks to fund the AI boom.
[...]
Shares in robot-maker Unitree (688836.SS), 8,000 times oversubscribed by retail buyers at listing, have halved since they started trading in August, and chipmaker CXMT (688825.SS), opens new tab has lost more than a quarter of its value in the past month.
Chipmakers MetaX Integrated Circuits (688802.SS), and Moore Threads Technology (688795.SS), which leapt 700% and 400% respectively on their market debuts last year, have also halved in value since July.
[...]
Shares in optical parts makers Zhongji Innolight (300308.SZ), and Eoptolink Technology (300502.SZ), are down roughly 60% from highs in June and July, in part as Washington moves towards banning the one-time darlings from supplying US data centres.
Dumb question by someone mostly uneducated about how Chinese society works, wouldn't the government just step in and dump enough money to correct it? Edit wouldn’t the government just step in if...
Dumb question by someone mostly uneducated about how Chinese society works, wouldn't the government just step in and dump enough money to correct it?
Edit wouldn’t the government just step in if there were actually a problem worth stepping in for implying, theres no issue here, since they haven’t stepped in. But, idk how it works, this is a broad assumption.
Why would it need to correct it? Not every bubble is 2008. There’s lots of financial bubbles at any point in time. Them bursting is just price discovery in action. It’s the market correcting...
Why would it need to correct it? Not every bubble is 2008. There’s lots of financial bubbles at any point in time. Them bursting is just price discovery in action. It’s the market correcting itself.
There’s nothing inherently wrong with a bubble bursting.
Ever since Deng Xiaoping, the CCP correctly realized that planned economies are a fools errand. It impossible. Market allocation of resources, at least in a micro level, is necessary. Of course, they still maintain control over the economy, but they let markets figure out of the minutia. The CCP doesn’t need to step in when there’s an overabundance of boba stores.
Isn't this slightly contradictory? I'd think an economy that's planned but which is still flexible at low levels would still qualify as a "planned economy," making it decidedly not impossible, no?
planned economies are a fools errand [...] the CCP [...] let markets figure out the minutia
Isn't this slightly contradictory? I'd think an economy that's planned but which is still flexible at low levels would still qualify as a "planned economy," making it decidedly not impossible, no?
Government intervention in markets doesn't by itself make a country a planned economy. True laissez-faire markets have been out-of-fashion for a century.
Government intervention in markets doesn't by itself make a country a planned economy. True laissez-faire markets have been out-of-fashion for a century.
Offhand armchair analysis thought: Long term, letting the AI financing bubble pop is likely better, as it essentially wipes clean the slate for a more sustainable thing. Much like the dotcom...
Offhand armchair analysis thought: Long term, letting the AI financing bubble pop is likely better, as it essentially wipes clean the slate for a more sustainable thing. Much like the dotcom bubble popping drastically altered the funding landscape for the (at least a little) better.
From the article:
[...]
[...]
Dumb question by someone mostly uneducated about how Chinese society works, wouldn't the government just step in and dump enough money to correct it?
Edit wouldn’t the government just step in if there were actually a problem worth stepping in for implying, theres no issue here, since they haven’t stepped in. But, idk how it works, this is a broad assumption.
Why would it need to correct it? Not every bubble is 2008. There’s lots of financial bubbles at any point in time. Them bursting is just price discovery in action. It’s the market correcting itself.
There’s nothing inherently wrong with a bubble bursting.
Ever since Deng Xiaoping, the CCP correctly realized that planned economies are a fools errand. It impossible. Market allocation of resources, at least in a micro level, is necessary. Of course, they still maintain control over the economy, but they let markets figure out of the minutia. The CCP doesn’t need to step in when there’s an overabundance of boba stores.
This is minutia.
Isn't this slightly contradictory? I'd think an economy that's planned but which is still flexible at low levels would still qualify as a "planned economy," making it decidedly not impossible, no?
Like everything, it’s a sliding scale, but in general no, that would not qualify as a planned economy.
Government intervention in markets doesn't by itself make a country a planned economy. True laissez-faire markets have been out-of-fashion for a century.
Offhand armchair analysis thought: Long term, letting the AI financing bubble pop is likely better, as it essentially wipes clean the slate for a more sustainable thing. Much like the dotcom bubble popping drastically altered the funding landscape for the (at least a little) better.