Realized volatility in the Shanghai Shenzhen 300 equity market index remains at historically low levels despite the bear market in equity prices (the chart below shows a GARCH estimate of volatility for the 1st and 2nd Principal Components of sectoral returns to the SHSZ300 Index).
The price movement has been negative, but not risky, by comparison to 2015, when China was in a growth recession and had to allow the RMB to depreciate in order to ease monetary policy.
The 1st Principal Component (to which all sectors show roughly equal exposure) explains 75% of variation in the index. The 2nd Principal Component is proxy for financials.
NOW we know why Beijing is so interested in the South China Sea: Killer heatwaves are set to sweep across northern China within just 50 years. If they don’t leave, 400 million citizens could face a day where they’re left with only hours to live.
And that day will be a pressure cooker.
A report published this week in the science journal Nature Communications details the effect of climate change on China’s great North Plain, which contains the megacities Beijing and Tianjin. The area’s once fertile open fields have become among the most densely inhabited places on Earth.
But things are warming up. Fast.
“This spot is going to be the hottest spot for deadly heatwaves in the future, especially under climate change,” warned lead author MIT professor Elfatih Eltahir.
Ivor Large should be very happy if this leads to disaster for the Chinese. Your wish would be fulfilled.
Koh Jek Siew Not for Chinese, I have every respect for Chinese. But I hate the CCP and their lies and nationalism that will spell disaster for the smart, hard-working ethnic Chinese in Malaysia & Indon.