Famous for his bold, contrarian views on the market, the elusive British hedge fund manager Hugh Hendry takes the view that China is ‘Japan revisited’.
“The priority of economic management at the macro level should be to have a high re-occurring level of household disposable income….” Says Hendry: “The scorecard for China using that metric is really bottom of the class.
“Over the last 30 years, that ratio has almost halved and we are talking about consumption being 35% of the economy. Now when I say that, people scoff and ask, how can you celebrate the venality of consumption? Isn’t there nobility to building bridges?
However, infrastructure projects and steel plants that are publicly commissioned and have very uncertain economic paybacks ultimately require a subsidy from the household sector. “
Visit Hugh Hendry's article in Investment Week.