China's Fiscal Plan

At the heart of China’s demand problem is a crisis of confidence stemming from the anxieties of ordinary Chinese about their economic circumstances and future. In 2017, the year Xi began his second term and tightened his grip on the economy, urban households were enjoying the fruits of decades of strong growth, with disposable income doubling appro

This will result in a continued downward pressure on consumption, making it hard for consumption growth in the next decade to outpace consumption growth in the past decade.

Right now, there are two important policy changes that have come out in 2025. The first is DOGE aimed at eliminating waste, fraud and abuse in the government. The second is tariffs aimed at making global trade more fair

Which matters more?

The chart today looks at each in terms of their size relative to the GDP of the US. The scales are different to

For years, Beijing’s industrial policies have led to overinvestment in production facilities in sectors from raw materials to emerging technologies such as batteries and robots, often saddling Chinese cities and firms with huge debt burdens in the process.

One of the primary themes that I’ve frequently written about going back to 2020 and that has guided a lot of my investment decisions, is the concept that the United States is in the process of entering fiscal dominance.

This means that fiscal deficits are larger and more impactful for the economy and for financial markets than they used to be, and a

Fredonian demand for foreign capital will reduce investment and credit-fueled consumption abroad and the higher return on capital will otherwise increase foreign savings.