The Good, the Bad and the Ugly on the front page of a research paper of an investment manager seems odd – after all, China today is not what “the great leader” envisioned when he came to power or what he left when he died.
“Quantity has a quality all its own”
Mao Tse-tungQuoting Mao Tse-tung (the quote was also credited to Stalin and Lenin)
He has a point though and we will come back to the quote at the end of the paper.Another odd thing is to quote a 1960s Italo-Western (The Good, the Bad and the Ugly, 1966). Not to imply that China is the mirror image to the wild west with no rule of law in vast areas of the US during that time.
However, when looking at China today, people familiar with the country do see “the Good, the Bad and the Ugly” in certain areas of life, sectors of the economy or politics. Reflecting on all three and putting them in perspective should give a better basis to assess and evaluate current economic and political developments.Since most of recent news or research articles have focused (more or less undifferentiated) on “the Bad and the Ugly” – sometimes rightfully so and sometimes not (in our opinion) – we will start with these negatives and end with the more positive aspects of China’s re-rise.Chinese people often tell us when we talk to them about the problems the country is facing: “China is a big country – and a big country has big problems but also big potential”.
In the following pages we will not be able to dive into every single detail of those problems or silver-linings – the country is too complex for this. But we do hope to add a little bit more spice and insights to the ongoing discussion and encourage further investigation.
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