Thanks for this, It's well presented IMHO. With globalization changing around and currency fragility in ROW, do you have an opinion of these influencing your thesis?
I do believe that China re-opening is the biggest 'push' for global stimulus and thus demand.
But China's share of GDP is mostly driven by investment (more than double all advanced economies) and their consumption share has actually declined since the 1980s (barely 50% now vs. US 70%).
For the world's second largest economy, that's laughable. Esp. with their real per capita GDP only $12,000 (and it's taken them 20+ years to even get that ~ compare that to when Japan boomed in 1960-90's which saw their income soar to nearly $30,000).
It's clear that China has a repressed consumption and still depends greatly on the U.S> to fuel their growth (or another way saying it, U.S. deficits are fueling global growth).
I don't see thins changing unless there's dramatic rebalancing in the surplus nations (EU, China, Japan, South Korea, Russia, Saudi Arabia, etc).
Thanks for this, It's well presented IMHO. With globalization changing around and currency fragility in ROW, do you have an opinion of these influencing your thesis?
Thanks for reading Michael.
I do believe that China re-opening is the biggest 'push' for global stimulus and thus demand.
But China's share of GDP is mostly driven by investment (more than double all advanced economies) and their consumption share has actually declined since the 1980s (barely 50% now vs. US 70%).
For the world's second largest economy, that's laughable. Esp. with their real per capita GDP only $12,000 (and it's taken them 20+ years to even get that ~ compare that to when Japan boomed in 1960-90's which saw their income soar to nearly $30,000).
It's clear that China has a repressed consumption and still depends greatly on the U.S> to fuel their growth (or another way saying it, U.S. deficits are fueling global growth).
I don't see thins changing unless there's dramatic rebalancing in the surplus nations (EU, China, Japan, South Korea, Russia, Saudi Arabia, etc).