【讀者分享】To be there or not to be, is the world losing patience or waiting for another miracle? (Patreon)

Atlas shrugged...the 1st half of 2023 is to be behind us. From beginning of the year, the shadow of higher inflation, energy crisis are tending to be less concerned than expected. In addition, market quickly shrugged the chaos from US regional banks’ liquidity crunch and the debt ceiling anxiety. Capital market also shrugged the long duration concern thanks to the “AI phenomenon”.

In spite of above, the geopolitical concern are darker and disturbing, as Allison Graham said, “the risk is becoming worse before it will become worse”. The global economic landscape is being disintegrated rather than integrated again. There is clear trend more capital and investment are flowing out of China and flowing into India, Vietnam, Japan etc. maybe after a few year when we look back: When politician is carefully using the “de-risking” against “de-coupling”, the turning point is there already.

In China, the lift of lockdown in the end of 2022 was very chaotic. even though, the world was giving big hope to the recovery of the second largest economy. The reality is very pale. after half of year’s “back to normal”, global investors are again disappointed by macro economic data. The asset allocation into China’s market further slides, China is by far the most net sold market in Asia YTD and over 70% of inflows from Nov ’22 to Jan ’23 has been reversed. Global commodity prices are under selling pressure partly from lacklustre growth of China. On top of these layers, high youth unemployment (official data is 20% for 19-24s), LGFV debt trap, worse than expected export data make the headache more painful.

There is a Chinese saying” old wine new bottle” to describe the obsolete policies with a very attractive and fresh promotion. This may apply to the new stimulative package that China is guessed to launch a new stimulus package to ignite the very sluggish economy. The 1 trillion’s scale is rather limited compared to that of 4 trillions’ in 2008. With the same logic and willingness to step on the engine of the economic growth, government’ spending in infrastructure is expected to compensate reluctant domestic consumption and shrinking exports. This will further deteriorate whole country’s debt/GDP ratio and very like pose negative impact on asset quality of the banking system.

The world is swallowing the bitter fruit from China’s tantalising behaviour over decades. They overestimated the “promise” when China was signing agreements with them while underestimated their flippant character as it disappointed the world since it joined WTO with less commitment if needed.

In the week of June 14, both Bill Gate and Secretary of State Anthony Blinken visited China. They represented the most important power from American Economy and Politics respectively. The very friendly meetings with Bill Gates contrasted the very frustrated meetings between Blinken and China diplomats. Facing the enormous capital outflows and global investors’ impatience, China is so desperate to welcome the global investors back, the same time it is impossible to surrender its “orthodox ideology” when confronting the western alliances with more sanctions on high-tech sectors from the later and higher risk of military foray. To both sides they are seeking for a “mission impossible” solution, whether you labelled it as “de-couple, de-risk or de-whatever..”maybe no one will deny old war 2.0 is one way and the world tend to be fragmented.

To the world, the best solution is to “keep status quo, let de-coupling happen in a mild way and delay the very fierce confrontation as possible as both can”.

▶️ 七一閱讀獨裁政權寓言：如果全部人長生不死？如果眼盲會傳染？葡萄牙諾貝爾獎文豪薩拉馬戈導讀（中文字幕）
https://www.youtube.com/watch?v=HkqlAb0xT18