Rudolph-Riad Younes co-manages the $14.5 billion Julius Baer International Equity Fund. Here are key extracts from an interview he did with Barron's (subscription required):
....All the overinvestment is going to lead to deflation in that economy.On Chinese currency re-valuation
....It was 2%. It was a small step, a small gesture. On a non-news day, the yen and the euro move 2%. So it is nothing. Given the wage gap that exists between the U.S. and China , it is nothing. From a debt perspective, it is detrimental to the Chinese economy because suddenly every corporation in China that is highly leveraged will suddenly see their debt go up 30%-40% if their currency goes up 30%-40%. But more and more of the adjustment will fall upon us, because China is too powerful a force. We can't go to war with them. We can try global protectionism, but that will hurt us.....Not subscribed to The China Stock Blog? You can get updated headlines for free by adding The China Stock Blog to your My Yahoo page. Just log into your My Yahoo
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This article was written by
Ezra Marbach is a former investment banker who lived in Beijing in 2002-03 where he studied Mandarin Chinese and worked for a venture capitalist. Ezra previously worked for Internet-based venture capital firm UniversityAngels.com. Prior to that, he worked in the corporate finance department of Gerard Klauer Mattison, a NY-based boutique investment bank. Ezra graduated from Cornell University.