Taps Coogan – November 21st, 2021

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Leland Miller, the man who runs China Beige Book International – the largest private in-country data-collection network in China, recently spoke with Bloomberg to warn that China’s economy is slowing more than people realize and that the tech crackdown that started earlier this year is not a one time deal.

Some excerpts from Mr. Miller:

“Retail sales haven’t looked good for a while. They’re probably not going to look good going forward… If you’ve got this long term slowdown, a slowdown which is not yet baked in by most analysts, it’s going to be more precipitous than most people think, than can (a company like) Alibaba transcend the odds…?”

“This (tech crackdown) hasn’t ended. I think a lot of people think this was a 2021 story or it may have been a drop in the pan and then President Xi is going to move on… The idea that Alibaba got punished, here is the new reality, and things aren’t going to get worse, I think that’s a very bold statement to make… We’re not seeing your normal Chinese slowdown. We’re seeing a paradigm shift that we haven’t seen in 20 years… If you look at China Beige Book data, you’re seeing enormous de-risking in the financial sector, enormous de-risking going on in the property sector… The growth playbook has changed… and we’re going to be looking at much lower growth going forward…”

“Structurally, nothing is being done to empower greater consumption. Investment is falling but consumption is not being empowered right now…”

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