Monday, August 3, 2009

China's Economic Stability

From Jeremy Grantham's July 2009 letter:

"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."

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.


Related post:
Jeremy Grantham's Latest Letter

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