China Is Not Crashing
Panic over Chinese stock markets and the Chinese economy is irrational. There has been no historical correlation between the Chinese stock market and the Chinese economy, and there is no indication that the Chinese economy is crashing. In China, we see a maturing economy navigating a transition from infrastructure and industrial-led growth to consumer-led growth, still growing strongly but at a moderating pace. We also see a country navigating a social and political struggle as its rulers act to root out corruption. What we do not see is any reason to believe at this time, that political, financial, and market events in China will derail strengthening fundamentals in the U.S. With U.S. economic fundamentals continuing to strengthen, we can’t help but view the current correction in U.S. stock markets as pointing to a buying opportunity in high-quality names as they return to more attractive valuations. We are waiting for a retest of the lows, which may occur soon, to buy more stocks at bargain prices.
