China, the world’s second-largest economy, is often cited as globalization’s raison d’être. With the Shanghai Composite in bear-market territory, investors would be wise to pay attention.
Despite the putrid price action of late, the Chinese government is standing firm on its policy agenda. They’re trying to administer the medicine necessary to cure the debt disease rather than provide drugs that mask the symptoms, like so many other central banks around the world have done. Only time will tell how they’ll fare but extending the analogy, we’re seeing signs of withdrawal that can be at quite violent at times.
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