This is a strange time for China’s economy with mixed signals and crossed perceptions in every direction, dear readers. Alibaba, that well-known surrogate SOE, announced a 59% rise in profits, on the basis of the wholesale takeover of retail by online consumer sales via Tmall and Taobao. Which sounds great until you realize that it is at the expense of the retail section, resulting in the many empty storefronts and deserted malls, and the loss of the jobs that they used to support.
There is also the question of how such numbers as Alibaba’s would stand up to rigorous US accounting, and there may be an answer before too long thanks to signs that US regulators may gain access to the mainland accounts of China companies listed in the US, including Alibaba and Baidu. And quite right too.
Overall economy numbers issued in the past couple of weeks have been mixed as well, with some indicating improvements and others deterioration of the overall economic condition of the nation. The most significant data, it seems to us, relates to the fall-off in private investment, the reluctance of non-state firms to invest. But car sales seem to be holding up, and the restaurants are full. Starbucks outlets are clearly not short of business.
The Shanghai stock market, meanwhile, was kicked up into the 3,100’s earlier this week, and a market effort on Friday to push it back into the 3010s was curtly batted away with a sudden sharp increase over the line just after lunch. This market is very much a spectator sport. Keep cool this weekend, and remember the heat is not forever. Come to think of it, nothing is forever.