CNBC Fast Money
Invest in China? ROTFL
Summary: I had the opportunity to be on CNBC’s Fast Money today to talk with Tyler Mathisen and his partners-in-crime about investing in China. You can see the brief video by clicking here or by clicking the graphic above. As you will see in the talking points, barring a (highly unlikely) change of leadership in China, the answer is no. It’s not just the weak economy or real estate and other structural problems. The problem is one-man rule. I don’t my money to be in a place where one man with a brain cramp can ruin my day. As always, I welcome your comments.
Talking Points
Here are the talking points that I prepared for the producers to brief Tyler before the show. Just as I sent them—typos and all.
Invest in China? Not with my money!
China has a mixture of problems with the economy but the real problem are structural (property, debt, too much top down control) and Xi Jinping’s mistakes (Zero COVID blunder, Putin’s BFF, Alibaba, national security law, one-man rule.
Financial investors should stay away.
Direct (FDI) investors manage your exposure down; no new projects, minimum maintenance Capex.
Chinese economic reports pretty crappy (technical term)
Q4GDP 5.2%
Retail sales +7.2%; services +20%; jewelry +29% (2023 COVID comparisons)
CPI inflation below zero, 3rd month in a row.
Industrial prices -2%
Exports falling in dollar terms
RMB/$ -9.2% in 2023
Population 2023 -2.1M (half COVID, half no babies)
Stock market 2023 -6.8% (Shanghai), -12% (Shenzhen), -19% HK. (Huge gains in US (25% S&P, 42% NAS), Japan 32% (Nikkei), Taiwan 23.5%)
China’s real estate/debt problems won’t go away.
Property prices 70 cities -0.4%
Property investment 2023 -9.6%
Debt/GDP now 286%.
Worst debt problems property and municipal govts.
No construction = no municipal income
The real problem: The whole economy is controlled by one man.
FDI multi-year low, -$100B
New security law makes it unsafe for expats to be there.
Partnering with Russia/Iran/NK = more sanctions to come. Big mistake.
Chinese banks have now cut off Russian lending.
Capricious government(Alibaba,…) has killed technology growth.