China Urbanization 2.0
Comment of the Day

April 08 2020

Commentary by Eoin Treacy

China Urbanization 2.0

Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section:

Eoin Treacy's view

Here is a link to the full report.

The virus scare has highlighted how susceptible China is to the export market. They have worked extremely hard to get factories back to full capacity but, having succeeded in that objective, they now find there are no orders.

The objective of developing a domestic demand model, where the nation’s large population drives consumption of products and services, has been the model for the last decade. The coronavirus is only going to intensity that trend. From China’s perspective that is the only suite of policies that make economic and geopolitical sense.

Energy independence, automation, 5G connectivity, artificial intelligence and social media/control are likely to remain the primary themes of China’s industrial model. The Invesco China Technology ETF (CQQQ) has exhibited relative strength over the last six weeks and continues to hold an 18-month sequence of higher major reaction lows.

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