China , war and the market

It was during the Chinese New Year when I re-connected with one of my old friends, we have not spoken for a long time and before you know it, it was a more than 2 hours conversation over the phone. 

While I was happy with connecting with people again, I nevertheless felt uncomfortable with the topic of the conversation.

Before I knew it, we went into discussion on China, he quickly identified himself as a China supporter, from then on it was about whether the China is coming to an end. To him, the position of Xi JinPing is stable and the opposition is weak. 

Contrary to my claim of a weakening economy in China, the company he is working for has trouble getting workers to fill the production line, even with the salary of RMB3,000 per month.

Additionally, while Japan has 60% of its export to US during the 80s, China only comprises of 30% of its export to US. Therefore, China is less dependent on US for the wellbeing of its economy.

We then jumped to the potential invasion of Russia to Ukraine. I told him that I was not interested in that but he never-the-less sent me news of the subject with proofs by US of Russia military in Prusia. He talked about how close Russia was to Ukraine border. 

I simply told him that I have more interest to better roast a chicken, cook a pork dish than the Russia-Ukraine conflict. 

To be honest, these are topics that I do not like to discuss with friends, you go into a never-ending spiral of argument with no gain whether you win or not, it may even cost a friendship.

My view on China have not changed, it is not getting better soon. At least for the next year, Hong Kong is not going to do well, considering Hang Seng's deterioration since beginning 2021 and we are not even seeing its bottom yet. 

As for Russia and Ukraine, I am sure Russia will not initiate attack directly (a little too late to say it now). Was is about benefits, Russia will enter a war if the benefit out-weigh the cost, and at this moment, the cost of war is high considering there is little or no benefit. 

As for the military presence in Prusia, Russia did mention its military exercise with Prusia, definitely they are not asking the troops to charge up the hill, it will involve military vehicles, therefore you need to have the right facilities like a military base to park all those vehicles.  

One thing I learned in my fifty years of life is that fact is fact, and the meaning is the meaning you give. The warning of war came from the west led by US, they put meaning of war into every Russia's action. Even when Russia claimed that the military exercise was over and they were sending their equipment back, the west still claimed their worries about Russia potential invasion. All these without actual evidence demonstrating without a doubt of Russia invasion. Everything is all hearsay claiming to be the truth. 

Is that the way their legal system work in their own countries?

As for the market, many expect that the market will plunge if war breaks out, while rise if war is adverted. In actual fact, the opposite happens. Should Russia invade Ukraine, the market will shoot up. What we see now is war not happening and the market actually continue its down trend.

It is true that the threat of war leads to uncertainty and therefore causes the market to plunge. However, war is an economic event, and war causes shortage, price rises as a result. It is evidence from both Gulf wars that once war begins, the stock market surge. Peace on the other hand is stagnation and stagnation means deterioration of the market.

So after my read of the 3 markets 2 weeks ago, there is nothing much to see as the markets are still heading my way, therefore this boring essay.