Kyle Bass is founder and principal of Hayman Capital Management, and he is not keen in sinking investment capital into China at present.
He spoke with financial media in the US on Wednesday, highlights:
- China is allocating resources to state-owned enterprises
- China is moving away from a market-based approach and moving to a party-based approach
- All the profits are going to management and the party. It’s not going to westerners
- Western companies face a swath of legal uncertainties, referring to China’s expanded counter-espionage law, making it difficult to know what is permissible
Apart from market and legal considerations, there is also the war worry:
- “Quite literally since 2017, [Xi Jinping has] told you that his life’s mission is the reunification of China and Taiwan,”
- Xi is already 70 years old and thus a Chinese invasion of Taiwan will happen “sooner rather than later.”