There are three ways to repay sovereign debt: default, growth and inflation. Obviously, growth is the best way, but it’s not happening.
Of course you need to look no further than two huge success stories that have tapped the Chinese market, Blackmores Ltd [ASX:BKL] and Bellamy’s Australia [ASX:BAL].
There’s still huge scope for growth to come out of China and the rest of Asia. Naturally, Australia is incredibly well placed to benefit from this via our resources and service industries.
There’s plenty of money to be made off Chinese consumers. Not just for businesses, but for you, the investor, as well.
Automation, robotics, and 3D printing will obliterate China’s low-cost, state-subsidised manufacturing industry.
If the Aussie government’s paranoia is about hacking and cyber attacks, then we should cut all ties with the US. And we should get pretty cosy with China.
China is churning out oceans full of unprofitable steel because it’s the only way it can keep economic growth from stalling. To state the obvious, this is an unsustainable growth model.
When an economy the size of China grows, creates opportunities or makes mistakes, they will be felt by those smaller economies close to it, like Australia.
In comparison to Western economies, which are loaded with unsustainable public debt, China’s debt problem is on the private side.
OK Given that a large part of China’s wealth is trapped in unproductive investments, it doesn’t inspire confidence about China’s ‘rising middle class’ and ‘rising consumer society’.