Last Calls

Last winter, when I met Qi Bin, the direct of the research center under CSRC, I said that Chinese stock market index will go up but then end up closer to 1500 around the end of this year, unless the government takes some drastic actions. So the next few months will be the last call to sell you Chinese stocks unless huge policy events happen. There could be. China is planning to make more financial reforms, speed up more urbanization, give farmers money through land reform. But we have to tell after we actually see the specific policies. The SOE reforms might be at back burner for a long while, until China’s enterprises, private and public, all crumble, a prediction from a macro theory paper that I wrote with two colleagues in HKUST. BTW, the paper has been presented at U.S. Treasury and State Department and IMF and will be presented at NBER this summer. The intro may be accessible to normal people like me.

Another last call is to sell Chinese real estate. This year is likely to be the last year that one can sell at the current price in a long time.

If you do not believe, we shall let time to tell.