I get a strong suspicion that too many people are too overweight in Chinese stocks now. The reason for this is that after posting the China Tax and China Labour Law changes on a number of sites, there has been absolutely no response at all on most. High profile names ignore the posts, nobody commenting at all, either pro or against.

It therefore suggests to me that lots of people are presently very overweight in China stocks, they have got caught with the market weakness, and are now holding at a loss - waiting to sell any rise.

If, and its only an "if", the market weakness continues, and more and more of these people are trapped into China plays - you can foresee, imv, a lot of weakness coming into that sector, as more and more give up and bail out.

Quite remarkable that so many got duped into buying "China" as a safety against US/EU credit fears and recessions - only to now find its not as safe as they thought, and China stocks are also falling.

My own suspicions were that the China stock dream would go into breakdown and start its fall once the 2008 Summer Olympics had passed and the government can afford the luxury of upsetting lots more people and not caring about "face" during the Olympics that the world will be watching.

Is there another boom left in them before the Olympics comes and goes ? Will the boom not happen as its sold into ? Will they all meakly fade now and continue to do so ? Will they just keep on booming and not fall back again ?

Please discuss !!

Well, now even the so called "experts" are seeing and forecasting China is in trouble. Love it.

Said to everyone back in January this year to sell everything, as stocks were going to crash and got berated by the rampers and their abusive multiple alias names.

Said China was going into recession in 2009 and will suffer badly in 2009 and 2010, and now as it looks ever more firm as an event to happen, even the big boys start to acknowledge it.

I am so glad I stopped posting on AD v FN, the abusive rampers on there will now have lost so many people so much money by egging them on to buy these awful Chinese stocks with nothing but ramping, I tried to warn people but they prefer to listen to abusive rampers and not people putting out decent, if negative, opinions of stocks and markets.

Now, I can sit back and feel sorry for anyone still in stocks, or ramped into them by the uber bullishness of other posters. In this market speculative big potentials are worth a punt, certainly Chinese aim rubbish is not, anything linked with China is surely on for a very bad 2009, their credit crunch ad recession is only just starting, and the effect there will be bigger imv.

This from an article today :

http://www.telegraph.co.uk/finance/markets/3148364/Russia-and-Brazil-crumble-as-commodity-prices-crashRussia-and-Brazil-crumble-as-commodity-prices-crash.html

"""""""""Albert Edwards, global strategist at SociGenerale, said China depends on exports to US and Europe for its lifeblood, and could face banking problems of its own.

I think China is going into recession as well. This is going to catch investors off-guard. """""""""""""


I feel sorry for most caught in this mess, but a few people deserve everything that is coming their way, and hopefully some of those burned by these people, will let them know in no uncertain terms :)

Agree with you, Papalpower. SOLA, CREO, GNG, WCC, HAIK, etc all crumbling.

hyleo, it will be a double whammy effect. First they will get hit along with all other AIM stocks are liquidity is removed and people sell their shares for much needed cash.

Then, when the UK/US are over the worst, the double whammy occurs in all likelihood, and thats the China recession and credit crisis bites, so rather than rise along with other AIM stocks, they will get sold off even more as everyone scrambles out of the mess coming their way in 2009/2010.

I hope that people sold off all these Chinese stocks and have no risk weighting in them.

The headline should be "Get out of anything Chinese, before that all goes bang too"...........remember, they said UK housing would never go down...........the same idiots say China is bulletproof.................

Some reports on the issues :

http://images.businessweek.com/ss/08/10/1002_china_economy/7.htm

As I have said for years, NPL's are the problem in China, a slowdown would lead to meltdown worse than the US.

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http://www.boston.com/news/world/asia/articles/2008/10/03/economic_tribulations_reverberate_in_china/

Insulated, or going to suffer badly ?

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http://www.bloggingstocks.com/2008/10/06/what-does-a-recession-in-china-look-like/print/

And do not forget, China needs around 8% GDP growth in order to create jobs for the ever increasing amount of school leavers.


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And many many more............

Won't be long before PP is a buyer here.

Sadly, China is the only economic superpower left with the money to bail out the U.S. When they go into recession, the U.S. and probably the rest of us will go into a depression...

In my opinion.

Strawbs

China has no money, thats all talk and paper, what it does have is lots and lots of debt, its been run on a hyper version of the USA problems and so it will have bigger problems that the US is going through. All to come for China.

When China goes into recession, the US will be coming out of it.

Major problems ahead for anything related to China, IMO.

Anything China related must be a wonderful short for now and next year, there must be a good few percentage points still to drop, as their cash gets burned away.

That's my worry Papal. As I posted elsewhere. Governments around the world are making huge promises of bailouts.....but who's going to finance it! When China and Asia goes, we all go.... down the pan for a decade or two probably....

In my opinion

Strawbs.

China has underwritten all the US junk, thats why every man and his dog has been pumping China, the need to bump up the other side of the scales and make a balance.

Now that the US has collapsed it no longer matters, what matters is sorting the US out, before everyone gets to know the problem in China is perhaps twice as bad as the one playing out in the US presently.

Its all good, as China will probably collapse as a Communist country, and the turmoil will allow US and European companies to take the lead back and create jobs and wealth back in the western world.

The trouble is with China is that everything is controlled by the "official bureaus of statistics".

The West has learnt from Communism that sometimes its best to lie, and then correct with revisions later. So aptly done by the USA of late who say they are not in recession, only to revise figures 6 months later and so "well oh we were then but not now" kind of stuff.

China's economy has been booming along, probably in the realms of 20% GDP growth, but because those old Commies plead poverty to the rest of the world, and want exemption from WTO rules etc... they have consistently under reported their growth. You cannot plead poverty when your economy is growing at 20%.

While they said it was 8% it was probably 16%.

While they said it was 9% it was probably 18%.

They do this as it allows a "soft landing", now in decline (and unemployment is rising so forget their fairy tale) they can say its now slowed to 8%, when in fact now its likely 4%.........so they under report when its going up, and then over report when its going down.

This allows everyone to "see" a nice balanced set of figures", nothing to frighten anyone as they are averaging....................BUT.............they are now in the more serious stage of over reporting, while those in the know know that things are not good, they will spout to the world that the slow down is slight and still growing strong, but actually.........well.........its a very different story.

China is holding all the US junk, its now over reporting growth as it slides into recession, and social unrest is a major factor.

Worrying times ahead for anyone exposed to China.

Whilst the companies will still have to report their 2nd half 2008, still "bumper", everyone knows in reality that their 1st half 2009 figures will be awful.

Many people will be trying to hype up Chinese stocks on their still to be reported 2nd half 2008 figures early in 2009, but beware the 2009 figures coming later next year.

2009 and 2010, going to be some very sticky and nasty years for China in particular IMV.

Interesting read PP-thanks. Certainly not seen this angle mentioned in financial press. Plenty about Japanese companies being good value with stronger balance sheets and in position to export to China.

GNG announced today a defacto downgrade going forward. Their trading update remains in line, but the outlook is not so good now, and they admit that China is slowing down, this is what you will see, as it becomes apparent over all the hype that in fact recession is coming the way of China.

Chinese stocks certainly should be excellent shorting candidates for 2009 and 2010.

ADFN is really awful now IMO, it seems to be full of Chinese stock rampers, who all appear to have ramped themselves into buying lots of Chinese AIM stocks, and now they are trapped into them in a bear market and with China looking very very dodgy for 2009 and 2010, they are getting awful in their ramping and abusiveness.

I do not post on ADFN now, as said before, as its gone very downhill IMO, the majority of the posts are from what appear to be ramping crews,and they are so hard in trying to ramp Chinese stocks it makes you sick at times.

On top of the GNG admission that things are slowing down, today also saw ZTC (Chinese telecoms) say this which again is more evidence to say that things in China are under pressure, and those who said 2009 would be a bad year for anything China related, might well be proven correct :

"As has been widely reported, trading and credit conditions for SME's in the PRC have become increasingly difficult throughout the third quarter of 2008. This is due to deteriorating macro economic conditions outside the PRC and slowing economic growth and restrictive credit policies in China. As a consequence, our markets have become increasingly competitive, disruptive and oversupplied. ZTC has therefore achieved sales significantly below those seen in the same period last year.

As a consequence, the Company's working capital available to operate and expand its business has become constrained, as has been previously announced. The Company continues to review all aspects of its operations to reduce costs and improve efficiencies to improve the availability of working capital for new model and market development. The possible sale of assets referred to above is one example of a potential method of cash generation that is being actively considered."

Well worth a read for anyone with an opinion on or interest in, China :


http://research.standardchartered.com/researchdocuments/Pages/ResearchArticle.aspx?&R=56005


Well written and researched, and I would not argue against the opinions, in fact we are already seeing the Chinese governments knee jerk reactions to the troubles being reported by Chinese companies.

The China bubble wobbles some more - wait until it bursts.................

WHEN WILL IT BURSTS, LOOKS GOOD TO ME.

BANG POP OR A BURST

Just think, this is only the start - if it falls - the fall will be massive..........that must frighten the China bulls, who are already losing their shirts.