The shareholder return shift is the key differentiator here. Previous China rallies collapsed because companies kept diluting shareholders with endless adjacencies and cash burns. If buybacks and dividends are now systematic rather than opportunistic, that changes the risk/reward calculus significantly. The $23T household savings rotation thesis is compelling - even 1-2% movement creates massive flows. Still, I'd want to see more evidence that the policy stability actually holds when markets get volatile.
Excellent take. The shift from “growth at any cost” to capital discipline is the story to watch. If buybacks and dividends hold through policy cycles, this rally might finally have roots instead of rumors.
It does seem conceivable that BABA winds up being a top tier chip producer in China and that there are at least 1-2 other big winners in chips in China, which, given the size of the opportunity, is also potentially huge fuel, especially if they subsequently become export quality. All of BRICS long run on Chinese rather than US silicon is a scary size economic opportunity.
The shareholder return shift is the key differentiator here. Previous China rallies collapsed because companies kept diluting shareholders with endless adjacencies and cash burns. If buybacks and dividends are now systematic rather than opportunistic, that changes the risk/reward calculus significantly. The $23T household savings rotation thesis is compelling - even 1-2% movement creates massive flows. Still, I'd want to see more evidence that the policy stability actually holds when markets get volatile.
Quite some number of Chinese American refuse to invest in US ADR Chinese stocks.
No reasons are given.
I don't know why.
Excellent take. The shift from “growth at any cost” to capital discipline is the story to watch. If buybacks and dividends hold through policy cycles, this rally might finally have roots instead of rumors.
It does seem conceivable that BABA winds up being a top tier chip producer in China and that there are at least 1-2 other big winners in chips in China, which, given the size of the opportunity, is also potentially huge fuel, especially if they subsequently become export quality. All of BRICS long run on Chinese rather than US silicon is a scary size economic opportunity.