Deutsche's John-Paul Smith doesn't join the bullish crowd amid Beijing's push to open China's economy, instead seeing the same sort of signs which led him to call Russia's 1998 financial meltdown and market crash.
“There is potential for a debt trap in industrial companies which can trigger an economy-wide financial crisis as early as next year,” he said, issuing a bearish 2014 prediction for emerging markets. "If I am wrong on China, I am wrong on everything.” Smith also made a prescient bearish call on emerging markets for 2013, and has been a China bear ever since joining Deutsche in 2010.
“The proof will be in the implementation,” he says of Beijing's plans. “It will be very interesting to see if they really intend to go down the same ‘hard state liberal economic’ path that Russia did from 1999 to the autumn of 2003. So far, there is no indication they are prepared."
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