Practical analysis for investment professionals
07 March 2014

Weekend Reads for Finance Pros: China, Retirement, and Investing Mistakes

This week’s roundup of interesting bits of news and analysis comes to you via Hong Kong, where all eyes (and ears) were on the opening of China’s annual session of parliament. One of the top stories to emerge was the government’s announcement that it would increase the defense budget by 12.2% this year to 808.23 billion yuan ($131.57 billion), its biggest rise in military spending in three years. As Reuters noted, this was a strong signal from President Xi Jinping that Beijing is not about to back away from its growing assertiveness in Asia, especially in disputed waters.

The overall 2014 budget is a staggering 15.3 trillion yuan, or about $2.45 trillion. This graph puts the spending in perspective:


Another big topic, of course, was air pollution. In particular, Beijing’s seemingly ever-present, oppressive smog. But somewhat serendipitously, the pollution cleared this week, leaving blue skies, sunshine and clean air in Beijing.

There was also some interesting banter on Twitter about the state of China’s property market. In a short Wall Street Journal video clip, SOHO China’s CEO said the country’s credit crunch is going to worsen, liquidity will dry up, and cash will be very limited. She noted that the firm is sitting on a pile of cash that is “ready, just waiting for the market correction.” (The firm recently signed an agreement to sell two big commercial properties in Shanghai.)

In a series of tweets, China-watcher Patrick Chovanec, chief strategist at Silvercrest Asset Management, noted: “from everything’s I’ve seen, SOHO’s Zhang Xin has played China’s property bubble like a violin. . . . SOHO built up cash stockpile and used 2011/12 crash to buy up choice properties cheap from overextended debs. . . . now SOHO China is cashing in before things get ugly again.”

To which Esther Fung, the Wall Street Journal‘s property reporter, responded: Li Ka-shing (Asia’s richest man) “has also been selling assets in China. It’s quite telling.”

Real estate is an important sector for China, and if “things get ugly”, as Chovanec suggests, the economy will certainly slump. If you have a global portfolio, the news out of China could come in handy.

Here are a few other stories you may have missed in recent weeks.

Mathematics and Statistics


Investing and Behavioral Biases

The Fed and the Financial Crisis


Your Advisory Practice

And Now for Something Completely Different

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: ©

About the Author(s)
Lauren Foster

Lauren Foster was a content director on the professional learning team at CFA Institute and host of the Take 15 Podcast. She is the former managing editor of Enterprising Investor and co-lead of CFA Institute’s Women in Investment Management initiative. Lauren spent nearly a decade on staff at the Financial Times as a reporter and editor based in the New York bureau, followed by freelance writing for Barron’s and the FT. Lauren holds a BA in political science from the University of Cape Town, and an MS in journalism from Columbia University.

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