Michael Pettis article

Another fantastic article on China's difficult road ahead from Michael Pettis.

At Valor Private Wealth, we have not seen any evidence that China is doing anything more than talk about reforms in their economy.

Building empty buildings and infrastructure is not the panacea for all growth problems. It is extremely difficult to turn the ship around and reduce fixed asset investment and at the same time increase consumer spending.

We still believe we are in the eye of the storm in China's fixed asset slowdown. At some stage the debt binge becomes unmanageable and the party ends. And this has been one hell of a party!!!

Many mainstream journalists and fund managers are buying back into the story that China will resume 8% plus growth for decades on end. We dont believe the hype and are still very worried that there is more pain to come.