·Last week’s volatility hit global markets
·Domestic market conditions are pushing Chinese money offshore
·Single data points do not paint a full picture of China’s markets
Update: Z-Ben Advisors would like to remind the audience that the volatility witnessed over the past week is nothing new. It would be very dangerous to extrapolate a single week’s worth of activity to predict the near-term future. This is especially true for those selectively ignoring the bigger picture all in the hope of reaching some form of resolute conclusion about China’s economy. Make no mistake, China’s markets now have a palpable effect on portfolios across the world as a result of volatility transmission. Hence, any robust investment strategy (whether big or small) must take China into account. Likewise, Chinese investors’ increasing awareness of domestic volatility is encouraging them to diversify offshore, something that we believe Beijing has long expected. No matter what, global investors simply can no longer ignore volatility from China because it is inconvenient.
What began as a cottage industry is now a fully-fledged collective all predicting the demise of the Chinese economy. Nevertheless, not a single theory floated over the past seven years supporting these narratives has actually played out as predicted. Consider the following……
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