| GaveKal | Published: August 20 2009 12:31:00 |
| How China Got Here & Where is China Heading? | |
| By Louis-Vincent Gave | |
| In 1949, most intellectuals believed that communism would save China. By 1969, and with the horrors of Stalin revealed to the world and the Prague Spring having disillusioned most right-thinking people, intellectuals argued that China (with its cultural revolution) would save communism. Following that disaster, Deng Xiaoping rose to power and, by 1979, explained that capitalism would save China. Now, thirty years later, it seems that the world’s last hope is that China will save capitalism! So how did we get here? How could China, in the space of one generation, transform itself from a basket-case command economy to the world’s potential savior? And more importantly, what happens next? In our recent conversations with clients, we are struck by the moralizing tone that prevails when discussing current events in China. Indeed, most people that we talk to seem to believe that the Chinese government is doing little more than pumping up the next bubble, which will soon blow up in their face. But are things that simple? We tend to agree that Chinese assets will likely end up being the next big great bubble. But in the attached document, we try to explain why we may still be some time away from the pile-up that most expect. The attached chart book is quite long (some 50 pages) but through it we attempt to highlight what we believe are the important trends in China, and across the Asian region today. Most of these trends we have already discussed at length in our research but this is really our first attempt at putting everything together under one banner. In that respect, the attached document can maybe be seen as a ‘reference document’.... |
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