馃嚚馃嚦馃挵 THE CHINESE MIRACLE... OR NOT? 馃挵馃嚚馃嚦
China's development after its opening to capitalism and globalization is not surprising. However, everything has changed and its regime is returning to a totalitarian tone, Mao Tse style. Although the country is capitalist, its form is more similar to that of Latin America than to that of developed countries: corruption, state-control and benefit of some ad-hoc elites with the government, with social spillover to buy loyalties. Of course, there are many differences that point to it being able to rival and overtake the US hegemony.
Pros:
- It was always a power thanks to its large population and territory, which declined only when it entered Communism/Socialism
- Owner of many resources such as coal, rare earths, gas, oil, water and agricultural land
- Advanced education based on STEM approach
- It has high value-added industry and technology
Cons:
- Latency of nationalizations and doubts about private property
- Absence of a robust money and capital market without depth in the derivatives market
- Lack of freedom of expression, social repression and murders typical of this type of autocracy
- Lack of confidence in their currency unless it is backed by the dollar or some other commodity
Considering the above, should one invest in China? Looking at their numbers, the companies in the chart are great. The main challenge is to overcome its real estate and infrastructure crash, as well as to generate confidence.
China, India, Poland and Singapore have grown the most in recent decades [ https://jjplindex.blogspot.com/2024/11/poland-new-power.html ]. It's worth to considering. Nevertheless, geopolitical tensions may prevent access. The road is long, and many new countries could even emerge as better prospects in the future with less political risk.
The best analysis is yours!
J. Joel Padilla
Copyright: Joel Padilla 2024
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