IMO Americans are biased to overweight this. It doesn't matter as long as China can keep up appearances better than other countries for long enough. Investors will happily invest in a bubble believing that they are smart enough to get out before everyone else if things go south.
Bad bookkeeping doesn't keep the NBA and Activision from kowtowing to China, I don't see why it would keep people from investing there either.
One of the many Buffett-isms is to only make investments where, if the market were to close for five years, you'd sleep well. It is that premise that shapes my investing theses relating to China.
1. Yeah plenty of non-Americans think this too, _maybe_ if you said “westerners” it’d be defensible, but it’d still be wrong.
2. The nba & activision are selling goods to China, or maybe they put a little money into real assets to reach that audience. They’re not investing in Chinese financial instruments which is what the entire thread is about
I don't see the distinction. If they have Activision, Apple, Tesla and Disney as customers why wouldn't banks, financial markets and investors trust them? I would argue they already do, I highly doubt China has trouble floating debt or attracting foreign investment right now.
Why would investors not want to invest in a country that flush with liquid cash? I don't see how this is an argument that investors wouldn't see China as desirable.
By all means, investors want to put money into China. It’s the amount of money you want to put into an immature market that is the question. And that’s not a dig and it’s not jingoistic, it’s just a fact, when you run a large market for over a century you kinda build solid foundations that can’t just be replicated on the spot. China’s market developing is a great thing but it’s just too young to seriously think it’s ready to be a reserve currency today.
Americans aren't the only ones to overweight the shady monetary policy in China, and as a result it'll not become the defacto standard like the US Dollar is, as long as that shadiness remains.
Such as who? I agree with GP and still think this is biased projection. Factors such as growing trade control over APAC and a middle class larger than the population of the U.S. only speak in favor of the Yuan. Also, what you call shady currency control can be viewed as a be a signal of ensuring stability.
IMO Americans are biased to overweight this. It doesn't matter as long as China can keep up appearances better than other countries for long enough. Investors will happily invest in a bubble believing that they are smart enough to get out before everyone else if things go south.
Bad bookkeeping doesn't keep the NBA and Activision from kowtowing to China, I don't see why it would keep people from investing there either.