The 5 Biggest Misconceptions About China's Economy

The Chinese New Year continues and with it a sense that the nation stands at a crossroads. The Shanghai Stock Exchange Index is down nearly 25% in the past three months, hitting investors with the sobering reality of a heavy correction, but also the distinct possibility that significant buying opportunities lie over the horizon.

We have invited a number of long-time SumZero members with considerable experience in China to opine. We will share their candid thoughts and analysis with the community over the coming weeks through a series of Q&As and whitepapers. We begin with Shanghai-based fund manager Vladimir Yuzhakov (Long Jing Capital) and his firm’s paper “Challenging the 5 Biggest Misconceptions About China’s Economy.”

To quote:

"China has become the epicenter of investors’ concerns about the world economy. While some of the concerns have some grounding, we have found that most of them are exaggerated. The results of our observations during 4 years of visiting businesses in more than 70 mainland cities indicate that China is a largely misunderstood story. Below we consider five major misunderstandings: four tactical, namely debt and ghost cities; capital outflows; slowdown; and stock crash, and one strategic–transition from low to high added-­‐value manufacturing."

For a deeper understanding of the global markets, we recommend a close reading of this piece. Stay tuned for more to come on this important theme in coming weeks.