• Ernie Diaz

Follow the Money?

Let's tick off all China's bad news, before getting to the good news. Good news, that is, for investors looking to diversify their global portfolios. Not so good for Gordon Chang and other patient apprehenders of the Coming Collapse of China.

They always have reason to hope, though. Fever-pitch wailing about Evergrande's global contagion potential has broken, but predictions of a China real estate crash linger, as other developers default. More in the news is an energy crisis that will add to global supply chain woes. And fresh off the press are a new wave of regulations for the cosmetic beauty industry, Douyin-worthy duck lips be damned.

Juxtapose, if you will, these grim tidings with the fact that foreign investment into China reached $440b in the first half of 2021, a 168% YoY jump. What gives? Are global heavyweight institutions deaf to George, Chamath, and their over-caffeinated Youtube promoters?

"You have to wake up pretty early to find a macro or micro factor that has escaped a global asset managers' research department," says Edward Lehman. "At the end of the day, investment committees are swayed by China's fast recovery from COVID, appreciating currency, and robust economic fundamentals. When you compare those factors with the same in more traditional markets, China's economic challenges seem a bit less apocalyptic than the impression given in many media segments."

20 views0 comments

Recent Posts

See All

Like Hollywood, the western press is invested in narratives and emotional manipulation. Unlike Hollywood, that press has no compunction about skipping the third act of a story, if it doesn't fit that

Politics makes shortchanged bedfellows. As we've written before and will no doubt write again, the paradigm that China stocks = the VIEs of giant tech companies that make it to New York is keeping ave

As usual when the latest Chinese financial scandal hits the press, the unsaid bears as much scrutiny as what is said. "Property bubble disaster" - said. "Bond market collapse" -said. "Liquidity crisis