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As Hot Money Rushes Into China,
The Smart Money Is Getting The Hell Out
China has been ranked as the top growing country among the G20 since 2001
and is expected to retain that title for at least another five years (See Growth Chart).
However, the news coming out of China for the past three months has not been good.
It is looking more and more that it is not a question of if China is a
bubble and going to burst, but when.
The country has major infrastructure issues, troubling population dynamics,
poorly aligned employment outcomes, inflation problems, a real estate bubble,
an opaque and potentially insolvent banking system
(had mark-to-market accounting been applied), geo-political problems
with North Korea and Taiwan, and an underperforming stock market in
2010 (see stock comparison chart).
Smart Money Rushing Out
While the hot money is flooding into China, the smart local money is
doing everything they can to get their money outside of China,
which partly explains why Shanghai SE Composite has underperformed
other markets for the past year or so (see Comparison Chart).
The Smart Money Is Getting The Hell Out
China has been ranked as the top growing country among the G20 since 2001
and is expected to retain that title for at least another five years (See Growth Chart).
However, the news coming out of China for the past three months has not been good.
It is looking more and more that it is not a question of if China is a
bubble and going to burst, but when.
The country has major infrastructure issues, troubling population dynamics,
poorly aligned employment outcomes, inflation problems, a real estate bubble,
an opaque and potentially insolvent banking system
(had mark-to-market accounting been applied), geo-political problems
with North Korea and Taiwan, and an underperforming stock market in
2010 (see stock comparison chart).
Smart Money Rushing Out
While the hot money is flooding into China, the smart local money is
doing everything they can to get their money outside of China,
which partly explains why Shanghai SE Composite has underperformed
other markets for the past year or so (see Comparison Chart).
