Submitted by Taps Coogan on the 29th of April 2020 to The Sounding Line.

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Kyle Bass, founder of Hayman Capital Management, recently spoke with CNBC about the outlook for reopening the economy and his concerns about the offshoring of US pharmaceutical production to China, which he views as a national security risk.

Some excerpts from Kyle Bass:

“We never let (computer) chip manufacturers get acquired by the Chinese government or Chinese quote-unquote private enterprises, but one thing we did kind of allow the frog to boil slowly was we allowed our generic and prescription medicines to be manufactured in China and… that was a big national security slip…”

“We give China entirely too much credit… We just accept the fact that they say they are the world’s second largest economy. We must remember that the 800 pound gorilla in the room is that China has a closed capital account. They’re a bit of a Potemkin Village. I’m not going to argue that they don’t have a large economy, but less than 1% of the world’s global transactions that are cross-border settle in the Chinese currency and they purport to be 15% of global GDP because we happily convert their RMB based GDP into dollars… But they don’t have enough dollars to open their capital account. If they did (open the capital account), I think their currency would drop 40% or 50% and their economy wouldn’t be the second largest economy. It would still be a large economy… They are not as strong as they think they are…”

There is more to the interview, so enjoy it above.

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