China is the factory of the world. The country makes, roughly, 1 in 5 products in the world. Products that than are being transported.
China is also increasing its geopolitical influence. The Belt & Road Initiative is increasing. China keeps purchasing strategic assets at very good prices.
While the Coronavirus got much attention. Also for good reasons. It is a disaster for humanity. The economic effects are not certain.
But when we look at the underlying Chinese economy we see some serious problems. Problems no one talked about.
first of all, we have issues with economic data. China is capable of delivering data at a record pace. The data should be not completely true. China is also almost never needing to adjust data. What does that tell you? One of the indicators to look at Chinese economic activity that is hard to manipulate is electricity usage.
Then we come to the problems in the shadow banking system. This system is unregulated. Which is fine by me. But is putting some issues on the economy.
Then we come to the malinvestment in the Chinese economy. We all know about the ghost cities. Buildings without people living there.
Those problems with the economy are ignored. The problems caused by the Coronavirus is going to put additional stretch upon it.
It is best for all to prepare and expect the terrible things that are coming.