An Awesome Presentation On What Everyone Is Getting Wrong About China


Photo: US Global Investors / CLSA

Talks of a Chinese hard landing, soft landing, or in some cases a bumpy landing have been in the headlines for a while now. But some think the policy induced slowdown is going to reverse soon.A new presentation from U.S. Global Investors and CLSA considers the issue and China’s transition to a consumer-drive economy and aims to debunk some common myths about the Chinese economy.

The presentation references the government’s policies to move economic activity to interior parts of the country. It also highlights some of the biggest misconceptions on China like the belief that the economy is driven by exports.

Andy Rothman, CLSA’s China macro strategist, said he expects China’s GDP to grow 9 per cent this year. Speaking at the conference he said:

“I would say that almost everything that’s happening in China today is not sustainable long-term at the current speed or structure. China is going through an incredible boom in everything, from automobile sales to home construction and public infrastructure. So, nothing will remain the same.

And as I mentioned earlier, during the presentation, we’ve just come off of nine consecutive years where fixed asset investment grew at about 25 per cent each year and that process, that phase, of China’s build out, is over now.  It doesn’t mean that demand for commodities is going to collapse.  It’s just going to grow a bit more slowly, because so much of the infrastructure has already been built out.

So, we just have to get used to the fact that we’re in a new phase now, and things are still growing.  But, growing at a slightly slower pace, but on a much bigger base.”

US Global Investors has given us permission to run the presentation.

Now meet the politicians that are going to control China's economic policies...

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