One of the most hotly debated topics among emerging markets watchers is China’s economic direction – both in the long and short-term.
Indeed, says Hong Kong-based research house Gavekal in a Wednesday note, in the US and Europe, ‘it seems that most of the people we talk to are firm partisans of the Jim Chanos line that the Chinese economy is on a “treadmill to hell”.’
In Hong Kong, however, investors are ‘typically of the view that most Westerners looking at China are a little too keen to “notice the splinter in their brother’s eye, without perceiving the wooden beam in their own eye”,’ it adds.
Driving the point home, Gavekal’s long-time China commentator Arthur Kroeber and investor/commentator Marc “Dr GloomBoomDoom” Faber locked verbal chopsticks in a video debate on the question of whether China is overheating. The occasion was to launch Reuters’ new multimedia website Reuters Insider.
Kroeber observed that recent Chinese labour unrest could only force companies to improve wages and conditions, and therefore will help shift the economy towards greater consumption.
A litte more cheekily, perhaps, came Kroeber’s low-key response to Faber’s typically bleak observation that China was an accident waiting to happen, amid huge over-capacity in infrastructure and property development.
“You have no idea how big China is,” Kroeber rejoindered.
Related links:
Short China now! – FT Alphaville
Stop the Chinese steamroller, I want to get off – FT Alphaville
James Kynge: Are fears of China’s over-heating overdone? - FT
Roach: pooh-pooh to Chinese bubbles – FT Alphaville