This article was really quite interesting for me. The size and dependence of real estate as a proportion (third) of China's economy was well known but the level of debt coming unstuck, structural and demographic headwinds, simultaneous market inefficiency and youth unemployment and the potential for driving an Australian recession and collapse in the balance of payments is a real worry.
Geopolitically - I think this just brings into focus for me how profoundly stupid AUKUS is. The risks to me are more immediate - no better way to put lots of young people to work immediately than make bullets and have the rest of the youth fire them. A nuclear sub in 30 years when China may not even have the logistic and economic fortitude to have a prolonged conflict seems dumb. At least the HIMARS deal makes sense. You just have to make it clear that the cost of warfare is too high to deter. Military power projection for a small country like us is stupid. Diplomatic offensive, militarily defence and alliances is always Australia's play.
In the short term..
- what stocks benefit from a weak Yuan.?
- And where does one hide if the Chinese economy gets worse (after all our prosperity seems dependent on digging holes for them)?