YouSaid · the spoken record

Ben Harburg

lines on the record: 90
first: 2024-07-08
most recent: 2024-07-08
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“That Adani report came from Hindenburg, activist short seller. You also mentioned muddy waters. I wasn't going to bring this up, but because you mentioned Muddy Waters, they did a short report a few years back about Beika Holdings, a real estate company. And I noticed that is in your ETF. Do you have a view on sort of the bear case on co-holdings and why you disagree with it?”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, this is the Alibaba. I mean, you know, the only one bigger is maybe Tata and Reliance. So when you've got that scale of corruption and opacity going on, that's where I, and we've known this. I mean, again, any one of us who's been doing business in India since 2010 will tell you this is what it's like every day there on the ground. So it's kind of funny to see the Americans kind of walking in there acting like this is the new market without really truly understanding the reality on the ground.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“And it came out that the whole thing was as crooked as it could be. I mean, his businesses had a couple shareholders and it was all offshore. It was a wab of, you know, and even your friends at Iceberg research or Muddy Waters will tell you that these corporate structures in India are just an absolute mess. So yes, every now and again in China, we have these fraud cases like Luckid, which by the way is now an incredible business and is thriving again. I saw a muddy waters or one of the Citroen which one report on some Chinese company that had kind of fake Disneyland kind of knockoff theme parks or whatever. So you have these, you know, you have these narratives. That's fine, but these are not like the Adani story would be the equivalent of Alibaba in China being a fraud, right?”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Are terrible at investor relations, terrible at managing foreign stakeholder issues. We are constantly shocked by how poorly done. And if I were in another lifetime to create a new business line, it might be to do investor relations for Chinese corporates because they kind of undersell themselves to Western investors by not having the right people to deliver their message. So I think that's an issue, but I don't think it's an intentional shrouding of the truth or reout around the business. In India, you face kind of true corruption. So, for instance, as a commodities trader, I did a business with a guy named Gautam Adani, who is the closest ally of the current reinstalled president of India, Prime Minister of India. That guy's crooked.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so you're referring to kind of what are in the S1s and the filings around a lot of the Chinese corporates, and they need to do a better job of that. And the Chinese government is also very much on that today. And we had, you know, there was another period, which was one of those other worries that I stacked on all the other ones, which was there was the threat of delisting from the SEC and the public accounting oversight board, specifically because of the issue that you mentioned around shoddy accounting practices and things like that amongst the Chinese corporates that were listed on US exchanges. Apparently the SEC and those fears were assuaged because they pulled back that threat, the investigators spent a significant time in Hong Kong and other geographies around China understanding the picture and came away appeased. But it's no, it's certainly clear that a lot of Chinese corporates”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“So you said that China is a lot less opaque than India. As someone who has an amateur read some Chinese SEC filings or the equivalent investor presentations, I would say that some of those tend to be opaque. I'm curious if you agree with me on that, particularly with the Cayman VIE structure. But what you're saying as someone who's actually on the ground to do business in China is easier than India, lesser paid.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Starbucks, they've all been printing money here. And it's interesting to me actually that Elon Musk is able to walk this fine line of being so pro-American and kind of this flag waving guy who's taking all the DoD and the NASA contracts on SpaceX and yet comes to China very frequently. He's either here virtually or in person this weekend for the AI summit that's going on in Shanghai. He's constantly here, constantly pumping up the Chinese economy, constantly lobbying government officials here and is doing a great job of managing, I think, both sides of the Pacific. But all that's to say, I think that the kind of structural weakness in India is far greater than anyone anticipates. And we're just kind of sleepwalking into it because it's a nice, supposedly capitalist democratic narrative into which to redirect capital out of other parts of Asia.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“As someone who has worked in India and done business in India since 2008, I can tell you that it is far more opaque, far more corrupt than anyone. It's kind of favored, particularly at American governmental levels today, largely because it is a democracy and it sits as an adversary to China, right? Because of the kind of battles that the two have faced along the border in the Himalayan Mountains, there's the Kashmir region. There's this feeling that it's an ally, let's say, in the Cold War.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Positioned once we see a faltering in the West. And, you know, a lot of the Chinese, that point about FDI, a lot of the Chinese, the capital that was historically going to China has been going, been redirected either back to the US or to Japan or to India. And I think it's misguided. I think India is a bit of a mirage, actually. I think some of these other what are kind of markets du jour are not all that they're cooked up to be for many structural reasons we can get into. And so I think that money is going to start slowly to come back to China. It'll probably come first back to the blue chips, which is why we've loaded up our ETF on them. But I think it might still take half a year, but I think it'll come. And I think we'll see a nice rebound.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“You know, property purchases for the first time in a few months. So there are some of these pilot projects that are proving that they can do that on the real estate side. Public equities kind of felt like we've hit kind of a lower bound. You know, it doesn't feel like it's going to drop significantly, but we're still waiting to see kind of a healthy recovery. So I think once we see more of that, and our view as a firm is we load up on Chinese equities now because we think we're in a counter-cyclical environment where the US is running out of steam and you've got, you know, like you saw a few weeks ago, this daily drop of 500 billion in NVIDIA, that meme of Taylor Swift and NVIDIA kind of carrying the American economy would cause me to worry about its overall sustainability at these types of levels. And so I believe that Chinese and American equities are now decoupled and we're sitting at different places of kind of the economic cycle. And I think China is well.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Of the party. If they do it, they'll do it quietly. And you've been seeing they're adjusting interest rates. They're buying up ETFs. They are stabilizing banks. They're doing all kinds of different things domestically, quietly. But it's almost a point of pride for them not to come out with some kind of a cash handout type stimulus like we had in the United States that would create artificial or unnecessary inflation. So that's why I say they're not as concerned about that inflation number. So I think those people will slowly edge back into the market once the labor market stabilizes, once property prices stabilize. And we're seeing the first inklins of that. So for instance, they ran a pilot project over the last few months in Shanghai doing what I mentioned, opening up the buyer base, allowing people who had historically not been able to buy properties to buy them, lowering interest rates, just like little tweaks to the levers and actually improved.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“It is definitely weak. And again, it comes back to people, you know, the economy has been rough. People are losing their jobs. They're losing value of their properties, losing value in their public equities. And so they're spending a lot less because they're worried about when their next paycheck will come from. So again, they'll buy a luck in coffee rather than Starbucks. So the numbers are going to look lower because the price point is much lower for those products on an aggregate dollar basis. But they're afraid to spend. And that's why I say there's this $7 trillion of household savings sitting as a dam kind of backed up waiting for the market to feel safe again for them to reemerge. So for us, we think that's a great opportunity. We think that when you've got that amount of savings, it's not that there's no money. It means there's kind of infinite dry powder, but the conditions need to be met for them to feel like we can come back to the market. Two years previous question, I don't think that there's a major stimulus package coming. This is not in the DNA.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Brand. And so Gucci CEO on the earnings call is complaining and that you see that as an excuse. But in the data of the retail sales, consumer spending in China is well, well below trend. If you just drew the line from 2020, industrial production is up, but spending is down, whereas in the US, spending is way, way above trend. So is it fair to say that the consumer spending in China would be weak? And if you think that's going to change, why?”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Athletes like Eileen Gu are working with to make more culturally appropriate or tasteful clothing, whatever it is. But there's this localization. So Starbucks is losing out to luck in coffee in a manner coffee. And of course, any of the American or Western fast fashion companies like Unique Lozara, et cetera, are just being absolutely slaughtered by Sheehan and Temu and Cider and others. So there's a reshoring of brand.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Is being cut. And so people are still spending, but they're spending on much cheaper prices, which is great as a consumer around here. But it's part of a larger cycle, which we call consumption downgrade, where people were literally buying products and services that were first domestic. So this hurts global brands. So for instance, Nike came out with their earnings a couple days ago, stock cratered off the back of it. And they blamed a few things, but one of the things they blamed was China. And they just said that China wasn't consuming the way it was. This is an easy narrative in a lot of Western companies use China's decline as a way to excuse their overall poor performance. But again, when you come on the ground here in China, what you see is not that people aren't buying sports equipment. They're just not buying Nike. They're buying Anta. They're buying other domestically developed brands here who have worked better with local celebrity.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“I don't hear as much conversation around the deflation narrative here. And actually, in many ways, it goes back to that information arbitrage where the numbers look like they're down, but the quick reaction of Western readers or investors is that's because no one's buying. The reality is they're buying, but the price points are much lower. So you just don't see it showing up in the numbers on kind of aggregate basis. And this trend has been going on in China for quite a while. As the economic engine growth engine slowed. And to your point, it's still a lot higher than in the West, right? So 5% is nothing to sniff at, especially if we're in an economy of this scale. This isn't like we're Singapore or something like that. So for an economy of our scale to still be growing at 5% is great. But because of that downward trend, we've seen wages flat, even declining. We've seen”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“And so I think Chinese GDP in terms of growth bottomed in 2022. And since then, growth has been hovering about maybe a little bit above 5%, which in nominal terms, it's higher than our viewers in America, where in Europe where we have an inflation might suggest because China is actually experiencing a deflation. Mild deflation of not like 3% deflation, but less than 1% deflation with prices going down, deflation economists, a lot of economists see it as something that can build and cause recessions because if prices are going down, you should just hold on to cash and not spend money and then prices go down even further and it can exacerbate the most prolific example of that would be the Great Depression of the 1930s. How is the Chinese government or the People's Bank of China”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Or $188 visa-free for most people around the world to come to China. They're issuing visas, throwing out visas like candy to people. They're doing everything they possibly can. And there are delegations coming out from China every day to the four corners of the world trying to recruit foreign capital to come back to the market. Because the biggest challenge we have is all that FDI outflow. And so they are a foot on the gas, but my worry is it's a little too late or that at the very least it's going to take several years to rebuild that trust that was broken.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“And others in the New York Stock Exchange just ripping. So, why do I need to deal with geopolitical uncertainty and internal regulatory question marks and potential real estate bubbles and all these kind of ifs if there's just this kind of growth in the US side that makes up for all of it? There's no reason to deal with any other of these headaches. So I think that 2022-2023 period was where we really where they really lost track of the narrative. And it's only recently, you know, I think within the last 24 months that it's been all engines go foot on the gas to try to make global businesses and even just visitors understand that China is very open for business. Even just in the last week issued a new visa-free for, I don't think it was like 448 hours.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“2022, when we had, you know, she was received as next term, reappointment. And during that conference, they announced the new Polit Bureau. And I think there was a kind of a global perception that a lot of these new Polit Bureau members were loyalists rather than technocrats rather than meritratic folks that would help drive forward economic growth. And off the back of that news, we saw a lot of the lowest of lows that we've seen in many of our stocks. But I think it's just a narrative that China had in the headlines for that year plus that they favored stability and internal control over economic growth. And the problem that China is market faces today is you've got companies like NVIDIA.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“They are massively concerned about the state of the Chinese economy. I think they were concerned too late on it. So there was this kind of emperor has no clothes period from end of 2021, early 2022 until early 2023 where, and that's where we really lost it. That's where we lost control of the global narrative around China. Because to your point, up until that moment, it was perceived that China had done a good job of managing COVID internally. But once the West started reopening and China was still locked down, and then you had those kind of other negative news stories layering on. So issues around Alibaba and the boarded IPO of Ant Financial, the DD being forced to delist after listing in the US, all of these kind of negative narratives started stacking. And that's when, and then I think the real crash came October.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Anything. So, I mean, you know, where even the blue chip technology stocks today are still trading, someone like Tencent, there's no rational basis for 10c valuation today other than people have a overall macro malaise negative news story around China rooted largely in real estate also has to do with a lot of the macroeconomic or the geopolitical challenges that China is facing.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“The real estate side, but I do not think that the contagion there will undermine the forward trajectory of the overall economy, but it certainly has caused a decline in consumption, which affects different pieces of the economy. So it has affected other pieces of the economy. And more importantly, it affected the way global investors perceive China and therefore it causes us to be cautious around the entire equities market because we want to make sure that we're staying clear of things that could be irrationally depressed on the back of negative noise around the real estate space.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“I would not be a buyer, so we do not invest in the property space, and I'm not here to tell you that the property space is still investable and it's better than you think it is, and there might be opportunities to extract value from it on a distressed basis today. I think it is a secular trend that will see the decline of the property market as an important growth driver within China. And if you look at kind of the impact of different sectors on Chinese economic growth already, property the property market had declined significantly and it's been replaced by all the new technology, new growth, be it what we call green growth or the hardware manufacturing side of things greening energy, the greening of technology, what the World Economic Forum kind of all basks within this kind of fourth industrial revolution. But no, I'm not a buyer of Chinese equities on”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“So, needless to say, you think some of the headlines about the Chinese real estate market dragging down the Chinese economy are overblown. And I just want to hone in. Is it that you think that the real estate issue is not that bad overall? Or is it that you think that the impact of a Chinese real estate implosion is not going to be that large on the Chinese economy? And I guess I'll put a point on it. If I were to construct a basket of you of Chinese property bonds that yield 20% with Vanka and all the other things, with the risk that some could go bankrupt like Evergrand did, would you be a buyer of that basket or would you sit out and play at least decline?”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“But our value at a fraction of what they should be. And that goes all the way to the top. I mean, it goes to a name like ByteDance or TikTok, who is valued at a fraction of what a close comp like Meta is. So we see it across private and public equity, particularly on the public side.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“And ensuring that people feel like they're not being treated unfairly by financial institutions, lenders, corporates. This is a people-first market in many ways. And so that's what took them down. But I think you'll continue to hear negative noise. But again, it will be nowhere near the scale of something that could drag down the economy. The real effect goes back to your original question about information, which is we hear these noises every day. We hear that it's going to be another Lehman moment in the Chinese market. We hear traders are being told that everything is wrong in China because the property market is going to drag it downward. And that negative news cycle has created a hugely negative downward pressure on Chinese equities pricing to the extent that today we have so many equities that we look at across, you know, they're listed in Hong Kong or even in the West where they're trading today below the amount of cash they have on their balance sheet and they're still growing at double digits annually.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“You continue to hear a steady trickle or even a mild river of negative news points. So there are several other large property developers that are in bad shape, the likes of Vanka, V-A-N-K-E, of country garden. And you'll hear them missing coupon payments or other. And the problem again with someone like, you know, I think that really took down Evergrand was not as much the fact that they were doing everything wrong on the property side. It was that they were also cross collateralizing and had gotten involved in other business lines and they were issuing debt to people and they were mission those debt or those interest payments to retail consumers who had gotten some kind of a debt through one of their other side businesses and that's when the Chinese government really cracked down because if you know you can fault them for whatever you want but the Chinese government are hugely sensitive to consumer interest.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Barriers that are now enabling people to buy more if they want to. It's obviously a little bit too little too late. But ironically was the opposite of this kind of almost entrapment feeling that we witnessed in 2008. But the Chinese have always been much more conservative around their banking system. They were very proud of the way that they handled 2008 and also the Asian financial crisis that struck parts of Southeast Asia much harder than here. And so the net result of that was that they were much more strict when it came to giving loans to individuals. And again, with that kind of recourse that was much more stringent as well. So the net result, again, is just simply that on a quantifiable basis, the numbers are nowhere what we experienced in the West in 2008.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“That's right. And again, that's my point. So the developers were in this kind of Faustian bargain with the local governments and provinces because they were, in essence, very good for business, right? They helped to stimulate growth numbers. They kept people employed. So from the outside, it looked really good. And they just kept building absence of demand. So to your point, people weren't being needled into taking mortgages. In fact, it's strange. Up until very recently, the Chinese were very restrictive of property rules around who and who could buy property. So for instance, in Beijing, until very recently, you only could buy one property per household within certain parts of the city. And you had these really funny stories coming out of Shanghai where couples were getting divorced so that they both could buy a property and then secretly getting remarried or whatever. And so they're taking down some of those.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“So it's an interesting comparison between 2008 burst of the US residential property bubble and what China is going through now. I mean, I'll grant you, I did an interview in 2021. Actually, that was a good interview, but we did title it, is Evergrand China's Lehman moment? And in terms of having a domino effect on the broad economy, I would say that that has not happened.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Able to put their money into property and don't feel safe doing so, they're holding it back. So we've actually got this dam today of about $7 trillion of household savings that isn't being spent in the public equities or in real estate because people are worried about declining property and equity values as well as where their next paycheck might come from because we're definitely in a downward economic cycle as well. But it's nowhere near the kind of explosive type of conditions that we faced in the West in 2008.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“And I don't know how many times I have to answer that because definitively it's not. The market here is very different than the conditions you had in America. The banks have nowhere near the kind of NPLs that we were facing in the US. The amount of leverage is significantly lower. When someone takes a loan on their home here, it's kind of unrestricted liability up to the person. So they can't simply walk away from that property like people were doing in America when they realized that the home was no longer worth the amount they put in their down payment or whatever. And so you just don't have the same types of conditions that we were facing that led to an overall economic downturn. It certainly has created a very negative cycle around the Chinese economy because now that individual consumers, retail consumers are”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Commercial property, but also infrastructure. We have airports and train stations that are at a fraction of their capacity. This is the best infrastructure, I think, in the world, but it's not fully used. And so the net result of all that is that we really, we ran off a cliff as that quasi-Ponzi scheme of real estate developers that were building properties using advances from sales. And then we're needing to build out the rest of the property, but we're running out of money because they couldn't finance the forward sales because people were starting to realize that there was overbuilding, that the value of their existing properties was going to go down. That engine ran out of gas. The Chinese government has taken some measures to obviously take some of the air out of that bubble by stabilizing some of the largest property developers. One of the questions I get asked weekly is, is this Lehman moment?”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“So, property obviously, a huge problem here. We have a market here where for generations people were told your store of wealth is in your home and in property. So that's where you should put it. And property prices are always going to go up. And then there was this, let's call it a virtuous cycle at the time. We can call it a vicious cycle now where regional governments wanted to encourage large construction projects often by private sector as well as kind of let's call them quasi sovereign owned real estate development groups. And by pushing that narrative around savings and by getting people to buy and then by pushing more and more buildings, it created obvious clear benefits for them, right? So they had high employment, they had good economic growth numbers. But the simple reality was that they were overbuilding. We have way overbuilt here, not only in terms of domestic and commercial.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“So, you said you started your ventral capital business in China in 2015. I'm just looking at the value of newly built homes in China and the value is down 4%, which is obviously not great. But the rate of change is actually slightly less negative than it was in 2015 or around there. So can you tell us the last time the Chinese property market was undergoing stress? Let's put it that way. What was that like and how did China reemerge from that? And do you think this time is going to be different? Is it going to have a kind of a different flavor?”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“For several years now, has not had an accredited journalist on the ground here in China. So when you're reading about China News, which is a really important country for Australians give to their dependence on Chinese raw material exports or imports, they're reading about it from a journalist that's sitting in Seoul, Korea or Tokyo. So it's a very different dynamic when you're on the ground here. And we think that means you can generate significant opportunities by being here and knowing the reality on the ground relative to what others are seeing. But the problem we face is that if global investors aren't convinced of the trajectory of the market and the stability of the market, you know, fundamentals be damned, it's still going to be very challenging to get the kind of returns we expect.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it is very different. And I would say there's very few markets or trades globally and certainly within the last few decades that have the same amount of information arbitrage and information opacity. And so you get a very, very different narrative around the conditions on the ground in China when you're reading about it in New York or hearing about it in the news in London relative to being here on the ground and partially that's the Chinese to blame and partially that's kind of Western media outlets and their, you know, what narratives sell. So there's certainly been an easy narrative to kind of poke sticks at China, so to speak. But the Chinese did themselves no service by kicking a lot of foreign journalists out of the country, particularly over those kind of years around pre-COVID. And so you've had, you know, for instance, the entire country of Australia.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Over the past, let's say four years, China was actually early to emerge from the pandemic global recession. But I think probably at the beginning of 2021 was probably the peak in Chinese equity prices. And there's been a lot of bad news about China, specifically in the US in terms of its real estate market collapsing in terms of just its growth model being dependent upon real estate and the government kind of moving away from that. So I just want to ask, what has it been like as someone who's been living in China? I imagine it might be a different experience.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT
“Been a long time. So I came here as an intern for Motorola back in 2004 when China looked nothing like it does today pre-2008 Olympics. I then returned in 2009 as a commodities trader and built what was at its time one of the kind of largest commodity trading companies in Asia selling raw materials into China and had four offices in China and was running around all over the country meeting the PowerPlants and refineries and everyone else and then bit the bullet in 2015 and started a venture capital fund with some partners here in Beijing to invest in the technology boom that was just emerging at that time and have really been here ever since the Buddha Beijing 2015 and now nine years later I'm still here.”
2024-07-08 · Forward Guidance · Why The Chinese Real Estate Downturn Won’t Sink The Chinese Economy | Ben Harburg · IDENTIFIED FROM THE TRANSCRIPT