The Chinese GDP growth honeymoon is over
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Comments (6)
Jan van Leeuwen
13 Jun 2022A very interesting and enlightening article for a lay person in that field, Chris! Thank you very much. I was just wondering whether our government was taking after China with that autocratic type of economic policy? With the high import of Chinese goods (of not always good quality) on the market the relations of SA with China must most probably be strong.
Whitefoord
13 Jun 2022A most insightful article. Chris’ views on Naspers and Prosus are disturbing. Investors will hope he is wrong in his estimation of the future trajectory of these companies.
Michael Duys
13 Jun 2022A couple of observations: –
1. On demograhic decline: – 1-2% GDP growth combined with 1.1% annual population decline implies GDP Per capita growth of 2-3% not all that bad if you a citizen, not so good if you building infrastructure….
2. On International Sanctions – China has become the #1 trading partner for many, many countries around the world, especially in SE Asia, and Africa… Don’t over estimate the influence of the US on these countries. They may prefer doing business with the US but China pays the bills. Any comprehensive sanctions on China will have catestrophic affects on the world economy not just on China = > An invasion of Taiwan is a doomsday scenario.
3. – US has its own problems – Don’t assume anthing like a return to leadership by the US.. Their political system is completely disfunctional, and their fiscal position is precarious, and will only return to normal through the debasement of their currency which only enhance the downward trajectory of their politcal influence..
Interesting times indeed… and whilst I wish I could share you optimism about the relative strengths of the US (And the west) versus China… I remain sceptical.
Ismael
13 Jun 2022A very interesting point of view but can’t agree with his conclusions. China has spent billions opening Asian markets to keep growth at higher rates
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Chris Gilmour
14 Jun 2022Agreed a Taiwanese invasion is a doomsday scenario. Hopefully it will never comes to that. The one thing I didn’t mention is China’s utterly horrific debt levels. Frankly they are off the scale and it doesn’t matter where they are concentrated..in munis for example. That debt has to be repaid. As interest rates rise it becomes progressively more difficult to do so.
Chris Gilmour
14 Jun 2022China NEEDS globalization more than any other large economy. You are right in the sense that it has pushed a lot of manufacturing the way of surrogate E Asian countries such as Vietnam, Laos, Bangladesh etc. but as globalization fizzles out, which it is already doing, they all suffer. Eventually many of these sweat shop countries incl China will be marginalised by technology such as 3D printing and additive manufacturing. But in the meantime, China needs to keep the west sweet in terms of buying its products.