China is delicate
There has always been a contradiction in China being both a one party communist state and a free-market economy.
Now with youth unemployment so bad that the government has stopped publishing the figures, the property sector still in crisis, growth slowing and the currency devaluing, that contradiction is coming to the fore.
In part it explains re-shoring and friend-shoring, making sure your supply chain is at least in friendly, democratic, stable neighbours.
But this could go much further, investors have poured hundreds of billions of dollars into China and are now realising they don’t trust the government, don’t trust what it says, don’t trust that it is doing what it says it is doing and they are getting nervous.
China is not going to collapse but it is no longer the Midas of the world’s economy. It has flaws and frailties like all economies and being a one party communist state with a leader for life doesn’t help.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media