Above is a very interesting debate aired late yesterday on CNBC between Bill Smead of Smead Capital Management, Stephen Green of Standard Chartered, and Simon Warner of AMP Capital, assessing the implications of China’s latest second-quarter growth figures, which came in at 7.5%.
The debate nicely encapsulates the differing views on China, with Bill Smead (by far the most impressive in my view) nicely articulating the huge structural imbalances plaguing the Chinese economy and the significant downside risks that such imbalances entail.
On the other side of the coin is Stephen Green, who takes the bull’s view that China’s slowdown is cyclical rather than structural, and that China’s authorities have the fire power and ability to support growth as they transition the economy toward consumption.
In between is Simon Warner, who acknowledges the large structural imbalances, but believes that China’s authorities can avert a significant slowdown for a year or two yet.
Overall, it’s a neat debate with something for everyone. Well worth watching for anyone interested in the key issues and arguments pertaining to China.
