Ardevora's Lang: We're increasingly struck by signs of dwindling cost competitiveness in China

Chinese labour no longer as cheap as elsewhere

We scan global stocks for genuine oddity, starting with management behaviour. We take a closer look at a company's accounts, paying particular attention to the balance sheet and indicators of effectiveness of capital allocation.

We get an understanding of sales and cashflow, and we read what management says about the business and current conditions.  We look for evidence of either an unusually benign environment for growth - which management seems to be sensibly taking advantage of - or signs of past trauma and a change in behaviour. We reject a lot more stocks as we dig deeper. As we pore over potential global ideas, we are increasingly struck by signs of dwindling cost competitiveness in China. China: Are there reasons to be optimistic despite debt burden and Trump threat? There appear to be two reaso...