Trade Wars: The Cautious View on China

Published on
May 16th, 2019
Duration
32 minutes

Trade Wars: The Cautious View on China

Trade Ideas ·
Featuring Tony Nash

Published on: May 16th, 2019 • Duration: 32 minutes

Tony Nash, founder of Complete Intelligence, sifts through the noise regarding the trade war and discusses his current view on China. He highlights the extreme buildup in debt over the past 20 years, discusses the country’s poor demographics, and reviews where he thinks the Chinese Yuan is headed next, in this interview with Jake Merl. Filmed on May 15, 2019.

Comments

Transcript

  • JK
    Jay K.
    4 September 2019 @ 22:58
    I think the CCP will maintain control. I also think the Trump administration may not win re-election if we slip into recession.
  • SB
    Stewart B.
    12 June 2019 @ 19:25
    It would be great to have Tony back. Down to earth and insightful.
  • MF
    M F.
    26 May 2019 @ 14:42
    Very good and balanced presentation. I wonder if Tony has any follow up comments post the deterioration of US-China trade relations after the Huawei ban/chip supply choke by the US (along with several other China tech leaders being on a watch list, e.g. Hikvision, etc.). Despite his base case of several mini-deals occurring between the US and China on trade, I would like to know if that view is all off the table now, and given the narrowness of the China c/a surplus, so will the full US tariff implementation circa $500b and Huawei stranglehold mean his 7 USDCNY is too conservative and it doesn't bounce by year-end?
  • YZ
    Young Z.
    21 May 2019 @ 17:43
    Great video! Although Tony keeps calling the Chinese Yuan the Wong (the Korean CCY).
  • MM
    Mike M.
    21 May 2019 @ 16:49
    Any examples of public companies with supply chains concentrated in China?
  • DS
    David S.
    18 May 2019 @ 21:17
    The US is in a stronger position, but Chinese are smart, have the benefit of time and can endure more. At times, I think that they are playing GO while we are playing checkers. Trade wars are like lawsuits, they take on a life of the own once initiated and are very difficult to control. We will see how it develops. DLS
  • RC
    RJ C.
    18 May 2019 @ 15:49
    By far one of the most no BS and straightforward guys on China who has frankly keeping his story the same this entire time. Thank you Tony for sharing your work and to RV for pulling the good guys with truth to the table.
  • AG
    AlA G.
    18 May 2019 @ 03:04
    Maybe subsidies are part of domestics policies and no sovereign country would allow others to dictate/coerce its own domestic policies? (unless the country's leader is owned by another country, of course).
  • DR
    David R.
    17 May 2019 @ 16:35
    Great perspective from Mr. Nash, I agree with his general view and hits upon key Chinese weakness. But I have been seeing somthing much more concerning than a trade war developing. Reading Russell Napier's recent notes, crystalizing this view, markets are having a hard time pricing in a trade war. But few want to entertain the probability that the U.S has entered into a new cold war with China beginning in October 2018. imo markets have yet to still understand what is at stake. Even with the U.S having the cleanest shirt, deglobalising will not be painless for anyone.
  • TB
    Thibault B.
    17 May 2019 @ 12:02
    Fantastic, would love to see more of Tony in the future.
  • tc
    t c.
    17 May 2019 @ 11:27
    One of the best on the subject. I like so much his comprehensive grasp of the whole picture. Brilliant. Kudos to Jake for bringing it out of this guy. I hope Tony Nash is a regular.
  • PD
    Pat D.
    17 May 2019 @ 08:49
    Enjoyable, fresh perspective
  • BH
    Bin H.
    17 May 2019 @ 08:43
    Cautious is a great word to describe Tony's view. I think it could be the upper bound the trajectory
  • BX
    Ben X.
    17 May 2019 @ 04:38
    I wish I can give more thumbs up on this interview. In this whirl of good news and bad news. This is the most objective information and opinions I have heard for so long. China will go back to WTO era. It's not good for the Chinese economy, but it will not collapse. History always go three steps forward and one step back. The Chinese people will have the democracy only if the Chinese people wake up and realize that they need the democracy. Even though I'm very eager to see this thing happening and consider for the past 2000 years, China has always been a centralized government and the people and the culture are used to rule by the emperors. I'm afraid we are not going to see the total collapse of the CCP any time soon. Tony got this right.
  • BX
    Ben X.
    17 May 2019 @ 04:05
    Absolutely down to the point interview. He is absolutely right about the position of the CCP.
  • PC
    Peter C.
    17 May 2019 @ 02:43
    Real gem. Could we please have him regularly?
  • SA
    Stephen A.
    17 May 2019 @ 02:18
    One of the best interviews on real vision.
  • JH
    Joel H.
    17 May 2019 @ 01:53
    I learned alot on this, thanks guys.
  • NH
    Nathan H.
    16 May 2019 @ 23:26
    At last, some speaking intelligently and knowledgeably about the current trade dispute.
  • CO
    Craig O.
    16 May 2019 @ 22:55
    This piece should never have been run as a Trade Idea. Many who skip the Trade Ideas missed out on quit an informative analysis; more depth on the trade wars than you'll see anywhere else.
    • BS
      Bradley S.
      24 May 2019 @ 19:04
      Completely agreed-- this is an outstanding interview, and should be highlighted somehow for topical relevance and in-depth analysis. Suggestion for RV: content analysis could be used to help both subscribers and RV promotionals. Maybe experiment with scoring models, based on keyword / semantic analysis of transcripts and/or viewer comments..?
    • MF
      M F.
      26 May 2019 @ 14:45
      yes...excellent interview..but i also think it shouldn't have been in the trade section...nothing really specific, which trade ideas should be...Target, Stop, catalyst, timeframe, risk to trade, and entry price are table stakes critical to all Trade Ideas
  • IB
    Ian B.
    16 May 2019 @ 22:31
    Soybean storage is up 18% in US and Russia is exporting record amounts of soybean to China. Russia is expanding soybean production as well. Great interview but US soybean issue is partially trade related.
  • CM
    C M.
    16 May 2019 @ 16:58
    Don't agree that all of China's growth is synthetic due to debt driving the economy. While debt has played a role, the population's move from rural to urban is the biggest impact on changes in China. For a good comparision, people should readh "The Rise and Fall of American Growth 1870-1970" that covers the history in the US where the same move happened. Combined with technology that improved "transport" (i.e. of people, information, goods, entertainment) and healthcare, the transformation from an agricultural economy to a manufacturing then services based economy drove the wealth creation in the US. This same transformation is happening in China. Yes, debt plays a role, but saying it is only debt and totally synthetic understates what is happening in the world's #2 economy.
    • DS
      David S.
      16 May 2019 @ 19:42
      Good comments. I agree with the population move, but the debt will also play an effect. RVTV introduced Tri-Polar World to us with Jay Pelosky’s presentations. It is also probable that Europe will move somewhat closer to Asia and away from the New World. DLS
  • RM
    Richard M.
    16 May 2019 @ 16:15
    Wow, best analysis of the China trade war topic I have heard to date! This guy really knows his stuff (very well laid out and balanced). All this hysterical talk about how incredibly bad this is going to be for the American consumer is a little over the top. The crisis talk promoters are usually just talking their book (ie, Goldman Sachs, they get a lot of business out of the China trade and don't want to lose those profits). They don't seem to understand the basic economics of manufacturing substitution (eg, Mexico, Vietnam, etc taking over the production America is currently buying from China). It may take some time for all the substitution of manufacturing to occur which may lead to some inflation in the pipeline due to some increased costs - and guess what, the Fed (and ECB) will be tickled pink as they have been trying to boost inflation to no avail for years now! Could that crazy wily fox (Trump) be playing a multi-level game here that no one is seeing yet? I know, sounds a little to clever by half but you never know! !!! [*** Milton,would love to see some of his written work on RV Publications!***]
  • YL
    Young L.
    16 May 2019 @ 15:56
    great interview. would love to have Tony back again in few months to update. Well thought out, and explained.
  • AP
    Andrew P.
    16 May 2019 @ 14:45
    Good info (esp soybean narrative), thanks.
  • DL
    David L.
    16 May 2019 @ 12:39
    Thanks, a very informative interview that looks beyond the usual headlines. Appreciated that he did not seem to have a political agenda.
  • Nv
    Nick v.
    16 May 2019 @ 11:11
    In direct opposition to the Goldman Sachs report out last week. 100% of duties paid for by US companies and consumers
    • CM
      C M.
      16 May 2019 @ 16:52
      Functionally, that is how it works. Tariffs are paid by the importer. Tony's argument is that Chinese manufacturers will need to cut prices to a level that the added tariff paid by the importer keeps the price of the product the same. Or the government devalues the currency (which hasn't happened yet to the level needed) to keep the price of the product in dollars the same for the importer after the tariff is paid. From the Federal Reserve to Walmart, organizations are stating that prices are increasing. So not totally buying in that manufacturing can so easily be moved out of China to offset the tariff issue as countries like Vietnam will see increasing costs in labor and materials as the added demand for their products increases.
    • DS
      David S.
      16 May 2019 @ 19:47
      As Mr. Nash said the manufacture ends up paying with strong vendor competition. Goldman might like to update their post, unless they have other interests. DLS
  • MB
    Michael B.
    16 May 2019 @ 10:39
    I really liked what he had to say It seemed balanced and not politically biased
  • SR
    Steve R.
    16 May 2019 @ 10:01
    Great analysis, and accurate too based on my on-the-ground sources!
  • DS
    David S.
    16 May 2019 @ 09:33
    Excellent interview. Thanks. DLS
  • LC
    Lloyd C.
    16 May 2019 @ 07:02
    Great interview imho. Clearly well researched especially about swine flu being the main cause of a decrease in soy bean imports. Also, excellent points about Mexico, Vietnam and Bangladesh taking over from Chinese manufacturing. China has clearly hamstrung its own economy because the CCP is intent on maintaining its grip on power.
  • JE
    J E.
    16 May 2019 @ 05:40
    Ugh the biggest loser is the United States... what is this a pro trump analyst? Trump is unwinding the liberal world order with the trade wars. American company wants china market access. He is doing the exact opposite which is to shut American firms out of the Chinese market. You need to remember that its the American firms that import from china, they get shoot with a price shot. They'll still import from China with a import tax. The trade gap widen 10% last year with China. This year its going to widen even more. At the same time American corporations will lose market access in China.
    • LC
      Lloyd C.
      16 May 2019 @ 06:59
      Clearly China is playing by their own rules. The CCP can't open up their markets because xi just made himself president for life. Note also that rich people in China themselves want their kids to be educated in the US, they want personal freedoms and they're voting with their money to get out of China.