China’s economic challenges is reminiscent of Japan in the 1980s by Michael Fritzell
Hear Michael Fritzell relate how the current Chinese economy is similar to what happened to the Japanese economy in the 1980s.
“China reminds me a little bit of Japan, in terms of the size of the property industry 1989, Japan versus China. safe to say, of course when construction implodes the way it is it will have to have a negative impact on the economy. But you can deal with such problems by socializing them by printing money, essentially. Or you can have deflation debt deflation like we had in the great depression in the United States in the 1930s, that’s another way to deal with the problems of leverage, just bankruptcy, basically, or you can inflate your weight out of those problems and which route China is going to take is unclear. One is positive for shares. The other one is positive for bonds. it’s hard to say. Generalizing this way is not necessarily helpful. There are always pockets of opportunity. Certain companies like NetEase or whatever, might do well. Even in Japan, I mean, there are some companies like Uniqlo, that’ve done amazingly the past 30 years. So there are always positives and negatives. And I think personally, if on a macro view, people are very negative, that’s probably the time to look for these jewels of companies or trends.”
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You can find Michael Fritzell’s Asian Century Stocks: https://www.asiancenturystocks.com/ and on Linkedin: https://www.linkedin.com/in/michael-fritzell-1aab10/ and X: https://twitter.com/mikefritzell
4 Comments
That is an appropriate analogy but the Chinese population is much more significant and they have a large domestic economy. It will evolve slightly different contrary to what Mike have in mind.
Disagree. It looks similar but the context is totally different. Mike Fritzell is looking at this with a western lens.
Think China will figure its way out. Doubt that they will end up like Japan.
History does not repeat but often rhymes with