Personal Opinion on US and China in March 2016
personal view comment in budgetbabe:
i agree the transition to internal consumption will take quite a while. one of the challenges is in overturning suspicious/skeptical/condescending domestic view of domestic products. meanwhile not all excess productive capacity can be converted into being internal consumption driven. So we are seeing unprecedented expansionistic outward investment by China into its immediate neighbouring regions, not to mention outright woo-ing and "stuffing of money into hands". While not underestimating the challenges the Chinese face in reforming their economy, I am not however underestimating the singlemindedness of the Chinese government in seeing through their goals. (neither are the majority of the Chinese population, nevermind their disappointment at the stock market measures undertaken by CSRC to date.)
Singapore's key competitive advantage, I feel, is reputation and city management. I fail to see how effective bilingualism is still as much as of a game changer as in our early days. Most of the advantage in higher education in our early nation building years has already been chipped away.
While the government tries to promote smart nation as a multipronged strategy in raising technological entrepreneurship, solution to ageing population and as a supplement to our exports of infrastructural solutions (and fintech in gaining as much as of a foothold as possible in regional consciousness), active engagement in regional projects helmed by companies appointed by bilateral agreements is possibly crucial to buy time.
macroeconomic policies wise, the government has done very well with the various cooling measures in reducing debt and has bought a lot of people time and convinced quite a few to pay down on their debt. The current thought is no matter how much the developers whine, it will probably take a sustained US rate hike trajectory replacing the cooling measures for the government to unwind. (no property crisis, I am afraid for those looking to flip, just a regression of prices.)
Thank you for typing it out :)I watch Mr Dalio too.
"Remember asset class always outperforms cash! The only exception is during Depression."
agree! remember asset class does not always equals equities only.
"China needs to restructure their economy which is a difficult thing to do, and they also have a balance of payment issues. (i.e. outflows).
LeadershipLeadership to manage it matters! According to Ray Dalio’s contact in China, he claimed that China has very capable people in leadership. But not the stock market handling recently. That is not capable. Dalio thinks that China leadership capability is equal to the best in the world.
Heart TransplantIt is like China is going through a Heart Transplant! You need to right execution but it is going to be fine in the long term after the operation but it weakens you. But you will get through it and be better than before."
just talking about this: http://sgbudgetbabe.blogspot.sg/2016/03/how-china-will-affect-singapores-stock.html?showComment=1458487781548#c6516583389311602402
"Next big move – QE3 or even Monetary policy 3 where money is put directly into the hands of spenders. "
I'm betting on fiscal policy. Bernie probably may not win but he may have helped putting part of the solution out there - http://www.businessinsider.com/bernie-sanders-spending-plans-would-radically-change-the-us-2015-7?IR=T&r=US&IR=T
Crumbling infrastructure in America - http://www.cnbc.com/2013/11/21/crisis-in-america-a-crumbling-infrastructure.html
