Episode 403: China's Future Looks Shaky – From Tariffs to a Potential Debt Crisis
On this week's Stansberry Investor Hour, Dan and Corey welcome Charlene Chu to the show. Charlene is the China and India macrofinancial senior analyst at the independent global research firm Autonomous Research. Dubbed the "rock star" of Chinese debt analysis, she joins the podcast to talk all about China and India's current economic happenings.
Charlene kicks off the show by explaining her macroeconomic background and experience studying China's economy. She discusses whether China is still worth investing in, which specific area of the Chinese market looks most promising, and what's going on right now in China's property sector. Charlene also goes in depth on President Donald Trump's tariffs that will impact China and what the administration is potentially hoping to gain in negotiations...
One of the things the Trump administration has been saying is, "We actually signed a trade deal in 2020, and you did not live up to the commitments." And the commitments were increasing purchases of U.S. goods... Most likely that would be agriculture and energy... They may be looking for Chinese investment in U.S. companies as an option as well.
Next, Charlene explores India's weaknesses versus China in becoming a global manufacturing hub – this includes its bureaucracy, onerous labor laws, and lack of infrastructure. She says that India is currently where China was in the 1990s, and the country will require much more development and investment to catch up. Charlene then talks about the good and bad economic effects of China's communist government, China's looming debt crisis, and how the average Chinese consumer differs from an American one...
One of the things I learned from being in China is they are really on top of their investments in a way that I have not seen anyone in the U.S. [be] unless they're in the financial sector. People were looking at their portfolios on a daily basis... They're shifting their money around all the time.
Finally, Charlene examines China's demographics and explains why she believes the country's population will fall 60% to 70% by the year 2100. However, despite birth rates dropping, AI and technology may be able to make up for the declining number of humans in manufacturing roles and fill those gaps for several decades. And Charlene closes the conversation by urging U.S. investors not to worry too much about the Trump tariffs just yet...
I do believe the Trump administration is trying to address some longstanding imbalances here with the Chinese economy. And I do think a lot of the measures they're rolling out – even though they're going to hit the allies very harshly – they're really ultimately directed at China... There is a method in the madness.
Click here or on the image below to watch the video interview with Charlene right now. For the full audio episode, click here.
(Additional past episodes are located here.)
The transcript is coming soon.
This Week's Guest
Charlene Chu is the China and India macrofinancial senior analyst at Autonomous Research. Before joining Autonomous in 2014, she worked for eight years as a senior director in the Financial Institutions Group at Fitch Ratings in Beijing, where she oversaw the credit ratings of Chinese financial institutions. Prior to that, Charlene served as a senior analyst in the Emerging Markets & International Affairs Group at the Federal Reserve Bank of New York, where she focused on financial sector reform and monetary-policy development in China and other Asian countries.
Charlene holds both a Master of Business Administration and a Master of Arts in international relations from Yale University. She is also an elected member of the U.S. Conference of Business Economists.