China is the first country to recover from the global recession. Now, some people are predicting that it will also be the first to run into potential problems. Why? Because things have been good for so long. What kinds of problems would China face? The problems related to trying to grow too much. As Micheal Shulman puts it, "Chinese land developers and industrialists are now engaged in financial musical chairs — they will keep borrowing to grow until they absolutely, positively cannot borrow any more, assuming someone else will get left standing without a chair. Well, the U.S. financial crisis began when Bear Stearns found itself without a chair." The whole story here. Remember, Richard Band also mentioned about getting out of China in my past post. And, so has Martin Lau. I think it is time to sit up and pay attention, at least for the short term.
As of now, I am still vested in China Construction Bank. I am long term bullish on China, and believe that one day, the SSE will break its high of 5522. It is currently at 2808, so a long way to go before bracing for a crash.
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