China Update: July 2020
2020 is certainly going to be a year to remember. As Roseanne Roseannadanna famously said:
“It’s always something. If it’s not one thing, it’s another!”
I needed a good laugh this morning. Things in the world are looking pretty serious right now, even as capital markets look forward to an economic rebound and continue to rally. As the virus spreads and large-scale demonstrations continue in major cities, China continues to be a global challenge in many dimensions, and now the U.S. has ordered China to close its consulate in Houston.
We have written about China several times recently[1] so there is no need to cover the same ground again. We and much of the world are engaged in a very serious and global conflict with China. As the Wall Street Journal article explains, this escalation of the conflict is in response to China’s acceleration of “malign activities including visa fraud and research theft…”. The article makes clear there is a lot more of that to be addressed.
It appears this is going to be a long, painful, and potentially risky process. Capital markets are obviously fully aware of all of this-perhaps it is a good sign that they do not appear to be signaling dire consequences. We can only hope they are right; after a lot of arguing and posturing, we may see some positive outcomes. Perhaps we are all interconnected and mutually dependent to a degree that mitigates the potential for the worst outcomes.
Best Regards,
[1] Visit our past China-related blogs here: Hecho en Mexico. Porque no?, China Update #47, Trade, Interest Rates, and Investment Discipline, and The China Syndrome.
As President and Founder of Team Hewins, Roger serves many of our firm’s largest and most complex clients while leading the Management Team and setting the strategic direction for the company. Roger has over 30 years of financial and investment management experience, including trading and portfolio management for multi-billion-dollar institutional investors.
Originally published at https://teamhewins.com on July 24, 2020.
