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“Chindia”: A Misleading Portfolio Concept

BRIC or Chindia are merely convenient terms but can never be considered equals. The writer is right that investors should treat each of them on their own criteria and not homogeneously.

However on longer term both have somewhat hot economies which some people think are like bubbles about to explode. But I think all these new BRIC economies and some other smaller ones will sustain a managable level of growth which will be slightly more than highly developed nations. No doubt about that.

Now expecting them to remain as hot as they are today is naive. There is certainly great economic activity in almost all developing countries specially Russia, Brazil, India and China but keep in mind that only a portion of China is really the cause of the industrial boom, which is closer to Hong Kong, more specially the next door Guangdong province. Most of the rest of the China is not growing so feverishly.

I do expect that sooner than later China will have serious political crisis and that will hinder or suddenly put a burst on all this economic boom. This will be triggered by the Chinese hegemonistic attitude towards neighbouring areas like Taiwan, Myanmar, Vietnam, India, Pakistan and Indo China and perhaps Korea. Chinese are also expected to have major political implosions internally over the next 24 months due to increasing gap between the haves and have nots.

Over all nothing is certain anywhere. Eventually the United States will emerge as the best emerging market for next 2/3 years.
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