Markets - Chinese sinking, US in a Bull

I wonder how much of this is the years of the Chinese manipulating their currency finally catching up to them.

 

In with the obligatory ‘thanks Joe’!

 

Our investments are up 11%, I’m good with that. I’ll thank whomever.

 

If you are as old as I am you will remember the Japanese scare from the 90s. Crichton even wrote a book about it, Rising Sun. It is possible china can pull out of it but it seems their remarkable growth is over or close to over. There are major similarities between both rises. Growth fueled by cheaper labor for American export. A really insane property Market. A crazy high savings rate. I am not predicting a 20 year malaise like Japan has had but it’s going to be interesting to see.

 

I don't know danmanne65 - some folks (Peter Zeihan) are suggesting population demographics will be absolutely catastrophic for China, leading to a market free fall for them and very soon.

To listen to Peter it's (Gotterdammerung) for them.

I'm not sure I believe it but it's an interesting topic to consider.

 

You're welcome

 

The demographics are a long term problem but they still have hundreds of millions of very low wage citizens that could fuel economic growth. Their woes are largely self inflicted, especially their heavy handed tactics and their turn away from capitalism and capital markets. Yet another example of a totalitarian destroying his country from the inside in order to consolidate his power.

 

When I was back at UF majoring in international economics I had one professor that was very into the Chinese economy. Even back then I remember him harping on how it was all a fraud and a collapse was inevitable. His main point, if I recall, was you can't build a sustained economy from the top down. Or something like that.

 

Hello I-Boy

Question - And this is just speculation on my part - No one can deny the incredible economic expansion of the Chinese Economy this century.

However - it seems that expansion is hitting some serious road blocks now.

The high rise "over-build" is certainly just one indicator of numerous problems.

I was "thinking" that perhaps "Li" is shifting course to foreign policy matters: Taiwan, China Sea military base expansion, Belt and Road inititive, African "rare earth" metals policies etc are an attempt to shift from economic domestic policy to more ambitious foreign policy goals.

Thoughts?

 

Well I was moderating my actual outlook. I think their demographics major league suck. The one child policy and selective abortion and even infanticide, Has a majority of their youth being male. Their demographics are worse than Japanese.

 

I’m not an expert on such matters, but China was already hitting some economic roadblocks (debt, demographics) and foreign policy and nationalism are always a way to distract a population that is becoming uneasy with stagnation. Whether that is an explicit thought process of Xi or if he really has more nationalistic goals I don’t know. Probably both.

 

The one thing that strikes me as a bit odd about this OP on first glance is that it seems incongruous that the two separate markets would move so disparately, given how interconnected they are. It would seem that this significant downturn in the Chinese economy would necessarily serve as a drag on the US economy, at least to some extent

 

it’s not clear if they manipulate more than us

 

US markets aren't too bothered by the Trump indictment today, with all 3 major indices being up a little.

 

So President Biden hasn’t destroyed the economy and sold us to the Chinese government?

 

Not entirely accurate. The Chinese government had been taking a direct hand in their exchange rates for a long time. Trump actually got them to admit and stop it (or at least promise to) in 2019.

China Agrees To Stop Currency Manipulation, Trump Says