China's Economic Stability

From Jeremy Grantham's 2Q letter (link to my recent post):

My colleague, Edward Chancellor, strongly suspects that the Chinese economy is dangerously unbalanced and very likely to come unhinged in the next few quarters, surprising the pants off investors. - Jeremy Grantham

Stephen Roach, who has been optimistic on China for a while, is developing a similar point of view:

China must redirect economic growth towards internal private consumption.

Unlike most, I have been a steadfast optimist on China. Yet I am starting to worry. A macro strategy that exacerbates worrying imbalances is ultimately a recipe for failure.

Something to keep an eye on.

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China's Economic Stability
China's Economic Stability
Reviewed by jembe
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