Redwood: Bears in a China shop

I have been urging investment in China for the past few months. So far, it has been going well.

Last autumn the Chinese market looked very cheap, selling on eight times earnings and offering nearly a 4% yield. The background was persistent bearishness by most professional Western commentators. Today there are still plenty of bears in the China shop. I have just read a piece claiming China’s low public sector debt ratio of around 20% is really over 100%, if you add in pension liabilities, possible local government losses, and possible banking losses. The commentator did not say what such draconian accounting treatment would do to the much larger Western sovereign debt levels already...