Charles Dumas wrote a book called China and America, a Time of Reckoning in 2009 detailing his long-term view of China and the Rest of the World. He foretold China’s decision to switch from an export-oriented investment driven economy to a consumer-driven economy. China is working on this now but it is not without fits and starts. A key side effect to this transition is the collapse in commodity prices and with that good deflationary forces that help global consumers.
I have has had several conversations with Charles over the last years and value his opinion strongly. Charles is often published in the Financial Times and Wall Street Journal. Charles believes this China slowdown is good, necessary, fixing imbalances and helpful to global economic growth and stock prices because it will keep global interest rates low for a long time.
