“Since the 19th century’s Open Door Policy, when President McKinley adopted policies to encourage trade with China, the West and its businesses have been lured by the temptation of populous, previously closed economies, often to become victims when governments pull the rug out from under foreign companies in favor of domestic, often government-connected companies. This typically occurs after foreign companies invest large amounts capital into plants and training, share proprietary business processes, and reveal technology. The pattern is to rule the companies violated laws, regulations, or fair competition, then turning those markets over to domestically companies, often linked to the government.” – The Emperor Wears no Clothes
- Since inflation is under reported in China by 4%-5%, a 6% GDP figure is considered a hard landing.
- Skeptical the Chinese government can fine tune a dynamic economy any better than the Europeans or the Americans.
- A China crash would be more localized; nevertheless, China is 10% of the world economy. If they grow at zero, it would be a 1% reduction in global GDP: that is a big number, says Chanos.
- Chanos is seeing rapid fall off in construction equipment and rail expansion.
- On US brands, “we wonder how much they are really making.”
- It’s also difficult to for companies to get their money out – WSJ.
Popularity: 2% [?]