Whose opinion should we give more weight to? The Armchair General calling tactical moves from behind the lines or subaltern’s in the field engaged in the day to day struggle?
It’s a moot point. From time to time views from both are likely to be useful. What’s probably not a good idea is to rely solely on one or the other.
Armchair Generals have been noisily covered so far this year on China and last week Mr. George Soros was the latest to return to the tired narrative of what ails China. If you missed it his best sound-bite was this; [What’s happening in China] “eerily resembles what happened during the financial crisis in the U.S. in 2007-08, which was similarly fueled by credit growth,..”
At this point I could start a pantomime argument with an ‘Oh no it isn’t’. Instead though let me supply some comments picked up in the last few weeks from field commanders with assets already in the space.
Most recently heard, from Caterpillar: “Infrastructure projects are starting and for the first time in a few years, we’re seeing stronger demand from China,” said Caterpillar Chief Financial Officer Brad Halverson. Reuters, Friday April 22nd.
Yum: “The China business, which accounts for about half of the company’s revenue and that Yum plans to spin off by year’s end, reported an 11% system sales increase, adjusted for currency conversions, and a 6% increase at restaurants open for at least a year, the third consecutive quarterly increase.” MarketWatch, Wednesday, April 20th.
Micky-Ds: “McDonald’s Corp (MCD.N) plans to add more than 1,000 restaurants in China over the next five years, which would make it the company’s second-largest market after the United States.” Reuters, Thursday, March 31st.
The Green Monster: “Starbucks currently operates about 2,000 stores in 100 Chinese cities after 17 years in the country, compared to some 7,600 stateside. The company has plans to increase its Chinese fleet up to 3,400 locations by 2019.” Fortune, Wednesday, March 23rd.
Finally, from a firm just doing it: “..we’re seeing strong growth in China..” Mark Parker, Nike President and CEO, Q3 results conference call, Tuesday, March 22nd.
The point here is self evident so I’ll try not to labor it. Whose opinions would you give more weight to when thinking about long-term investment in this space? Noisy speculators or groups with established businesses making commitments that can’t easily be backed out of? Just asking.