China data

The monthly China data drop was out yesterday.

Given “reopening” is a powerful cyclical tailwind, it is hard to tell precisely what will happen to China’s households/consumers, but, at face value, this seems to be good data, with retail sales up, & fixed asset investment modest, required for “the great rebalancing”.

Recall we think the “old” China model of export orientated growth, and investment led growth, is essentially maxed out (dead) and requires a drastic increase in households share of GDP and consumption.

So, this data above, would be a step in the right direction.

It also means that, going forward, should this continue, China would need much less commodities than it currently consumes, which would be a clear negative to the BHP/RIO’s of the world.

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