BofA’s master strategist is bullish on China.
The Price is Right:“new world order = new world bull” as Trump drives global fiscal excess; stay long international stocks (Chart 3) as US exceptionalism positions rotate to global rebalancing (note $1.6tn US equity inflow in 2020s vs. just $0.4tn to global funds–Chart 4); China our favorite long as end of deflation catalyst for Japan & Europe bull markets shifts to China.
I don’t think so. China is Japanifying at spectacular speed as the property bust kills bank lending.
While I agree about the risk, the problem facing Japan and China are very, very different.
The root of the Japanese economic crisis is not the bank debt : the debt is merely a symptom, not the cause. Instead, it is the US forcing Japan government to ‘liberalize’ and no longer dictate to their companies what to invest in, starting with financial deregulation. That resulted in the collapse of the ‘Japanese model’. The country was the number 2 economy in the 1980s, now they’re behind India.
The CCP owns all the banks in China, a crisis through banking collapse is not possible. It will be bailed out. The one and only risk in China is unemployment.