Will Macau Casinos Be affected By China’s Credit Exposure & Crunch?

Posted: October 10, 2011 in Uncategorized

10th Oct 2011

News Commentary by:  Mah Pi Sung  (An Asian casino expert)

Why Foreign Investment Analysts Think Badly of China

The following news report by the Chinese Newspaper (Zaobao) in Singapore gives a very balanced view on China’s credit situation and tells the most important fact about why most foreign analysts are just blinds leading the blinds…

The fact is, “that China is so big and it tends to give people a wrong perspective…”

I fully agreed with the writer on his assessment of China’s financial state of affair.  That for the start, it is impossible to give an accurate estimate on China’s key stats and data.  Much are left to speculations.

Will Macau casinos be affected?

Beijing will save them... no big deal

My assessment is that,

–   Though the “reported” China’s shadow banking private loans is as high as 4 Trillion yuan, it is still a small part of China asset base.  Considering the country has been in high gear of economic development over the past 30 years.  Not to mention that this figure might not be accurate at all.

–   That China is not operating under proper and free-market model capital market as such like in the West.  The Chinese state-owned banks would be supported by its government (the Communist father) regardless of credit exposure.

–   A few private companies/enterprises in Zhejiang’s Wen Zhou city gone bust doesn’t mean that China is going to collapse like Euro Zone… These foreign analysts simply don’t understand China, as usual.

–   The 18th Chinese Communist Congress will be held next year, in September or so.  From now till then, Beijing government would not let the market collapse, for sure.  Dear Mr. Hu (Chinese president) would not allow that to happen to his final term before he hands over to the next generation of party leaders. 

So, just remain calm about China financial state of affair… and yes, by the way, Macau’s casino business will continue to thrive. 

For USD to be the safe haven, the Yuan has to be stable...

 

 

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