What people don’t realize or simply choose to ignore is that China is no longer just a source of cheap labor or a manufacturer of low tech goods. Innovation in China is actually a thing and many Chinese companies are creating cutting edge technology. Sure, they imitated the West for years, but so did Japan and South Korea before both nations became tech superpowers. The only difference is, China got there faster.
China was never going to embrace a Western-style democracy. That was a pipe dream concocted by Rhodes Scholars and New York Times columnists, but it gained traction because most people don’t know shit about history or the world. Democracy is not in China’s DNA. That is one system China will never emulate. The Chinese endorsement of capitalism was not an endorsement of democracy. They embraced capitalism because it was a better economic system and they wanted to take advantage of global trade. As a result, China grew incredibly wealthy. But make no mistake, China’s economy is controlled by the state and the communist party. Many in the West can’t come to terms with this because watching a communist nation of 1.3 billion people become an economic superpower (in less than four decades) is unnerving, specially when achieved in defiance of Western political values.
As an investor you can’t get bogged down by this shit. Your role is to make money and money should always follow the greatest return on investment. If that’s in China, so be it.
Long TenCent (TCHHY)