This week, I'm going to conclude my musings on China with two very different takes on how to profit from the economic superpower.
One of the most eloquent China bears at the moment is Hugh Hendry – the boss at hedge fund managers Eclectica. Earlier in the year at an event in London, Hendry very articulately took up Professor Michael Pettis's argument (summed up in this column a couple of weeks ago) that China was prioritising an increase in output over an increase in real wealth. Hendry's view was that output growth as a political end within a fixed currency regime was bound to lead to asset bubbles and ensuing price crashes.
But what Hendry didn't tell the audience was that he's made a big bet on this eventuality – one that's soon to be spun off into a separate, potentially high return fund.