As shorts like Jim Chanos gear up for China to implode under the weight of itself, others are taking a more mixed approach to investing in a country that has seen explosive economic growth.
Enter RBS’ Ben Simpfendorfer, who is a self-described short-term bull, medium-term bear when it comes to China.Among his concerns creeping inflation and the imminent revaluation of the yuan.
Here’s his point on that, which is interesting:
The PBOC meanwhile appointed three new academics to its monetary policy
committee in late March. The existing member, Fan Gang, stood down, so the
total number of academic members has grown from one to three. It might be that
the PBOC genuinely wants more impartial advice, or it believes that their
arguments for policy changes will carry more weight with the State Council (it is
the State Council that decides monetary policy).
It is thus worth noting that Xia Bin, one of the new appointments, works with
the Development Research Centre, the research body of the State Council. He
also said in an interview on April 1 that the CNY should be returned as quickly as
possible to a managed float. Li Daokui, another appointment, was quoted on
April 7 as saying that interest rates may rise once CPI rises above 3%. Both
appear happy speaking freely to the media.
His note also includes some useful, timely charts that you should keep handy.
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