Concern over a hard landing in China is always on the list of things that we are supposed to be worried about. Mark Mobius has had his eye on and money in China and other rising economies for a long time. Here are his current thoughts:
- China isn’t in for a hard or soft landing, it is going to continue to fly.
- If you consider the number of people who still need housing in China it makes the idea of a housing bubble seem unlikely.
- Chinese wages are going up 10% a year which year after year makes housing more affordable (if housing prices go up less than 10%, they have actually become more affordable).
- China now putting more money into hard assets and less into U.S. Treasuries.
- Globally, people are starting to realize that they can’t sit on bonds that are earning less than inflation. Equities, on an earnings yield, are obviously much more attractive.
- Emerging markets now make up over 30% of the market cap of global companies.
- Mobius cites derivatives as still being his biggest concern, even post-2008 collapse.
- China isn’t in for a hard or soft landing, it is going to continue to fly.
- If you consider the number of people who still need housing in China it makes the idea of a housing bubble seem unlikely.
- Chinese wages are going up 10% a year which year after year makes housing more affordable (if housing prices go up less than 10%, they have actually become more affordable).
- China now putting more money into hard assets and less into U.S. Treasuries.
- Globally, people are starting to realize that they can’t sit on bonds that are earning less than inflation. Equities, on an earnings yield, are obviously much more attractive.
- Emerging markets now make up over 30% of the market cap of global companies.
- Mobius cites derivatives as still being his biggest concern, even post-2008 collapse.
