How To Play The China Boom
Xi Xiping is firmly the head of China. Look for major changes in the near future.
The most important change is the loosening of the zero COVID policy. This will enable a much greater percentage of the Chinese population to actually become productive again. This has a number of different effects:
• China will be able to compete for exports again
• look for increased demand for raw materials
• look for an increased muscular foreign policy
these effects are going to have major impacts on markets around the world. You may expect:
• lower prices on finished goods thus helping to reduce global inflation
• but increased demand for raw materials will increase global inflation
• global tensions are already high due to the war in Ukraine but China will press the issue in many other countries including Latin America and Africa
So how do we make money from this? Here is how I am going to play this resurgence of China:
• get long Chinese stocks
• get long select commodities
• get long global defense stocks
I have been reporting to you for a couple of years about the coming twilight of China. I am not changing my opinion on that thesis. But the release of 0 COVID policy will cause a rebound in the Chinese economy over the near term. So we must adjust our short term investment policy but remain bearish on China over the long run.
I suggest subscribing to the Super Premium membership to see my actual trades that I will be doing to make money from these changes.