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Thursday, March 28, 2024

China Dissected: CLSA’s Andy Rothman Speaks

Courtesy of Tyler Durden

Now that China is once again back in the center of attention, we present the latest from one of the undisputed leaders in Chinese analysis (albeit extremely bullish): CLSA, and specifically Andy Rothman’s latest edition of Sinology, “A Wild Ride.” In a nutshell, CLSA sees virtually no signs of overheating in China, and all is good, with lines of people in front of Hermes boutiques all over the place (with some caveats). This is ironic because lately even the Chinese press has quoted Chinese real estate investors and management teams as saying that the entire Chinese market is one unprecedented turbo-bubble. More on this soon.

Some notable observations: consumer sentiment in China is now at an all time optimistic high: alas, there is onlly one way it can go from here.

Comparison of China and US consumption. Guess who is leading world purchasing. Too bad, Chinese GDP is less than a third of that of the US (and even that number is highly circumspect).

For those who think that Zara just monopolizes every block in Barcelona, take a look at this (map of middle-class distribution).

And just in case you think that Hermes dresses are limited to philanthropic wives of hedge fund managers that made a billion (for themselves), then lost ten billion (for their LPs), you have not been to China.

A look at where CLSA sees actual tightening within Chinese markets.

Here is a chronological look at China’s required reserve ratio and 1 year benchmark interest rate.

Full CLSA report for all you Sinofiles attached.

Attachment Size
CLSA China Feb.pdf 1.53 MB
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