China: The Tale of Two Economies

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April 25 (Bloomberg) -- J2Z Advisory President Jay Pelosky examines China’s economic growth slowdown with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)


This appears to be slowing.

China stock fell to their lowest loss in two months is a after the nation's weakest liquor maker reported slowing profit growth.

Is this just another sign that the country which was supposed to surpass the u.s. has as the largest economy, is it a sign that may not make it?

I know you just got back to a trip to china.

I know you are concerned about pete -- people putting money to work.

When you were there, what were the things that some rice or concerns you most?

We had over 25 meetings in three cities.

The 2009 stimulus package that china put in place to stabilize its economy after the great financial crisis has now seen a massive policy mistake.

There are several reasons for that.

2009 would have been the opportune time for the leadership to do the hard read warms and blame the west for the need to do it.

Secondly, this was made even worse i the fact that demand is walling and china will stop.

We have seen this on the cities that are ghost cities that built and they built.

For what?

We take the high speed train.

It is also filled with pollution.

Two other solutions.

China has run up against the laws of nature.

They're going to have to change that.

Huge cost to fix their polluting industries.

Then you have massive corruption.

Much of that came back from 2009 onward.

That will really limit the pace of reform.

Some people worry that we had 2008 here in the u.s.. we have the european debt crisis that followed.

I think it is unlikely.

We spent a lot of time looking for the catalyst for that and it is hard to find it.

China has many problems.

The analogy that came to mind repeatedly was of a juggler trying to judge too many balls.

It is fair to say the problems in china are known.

Their are many solutions the government can use to try to offset the risk.

Most of us in the west are worried about robert t in the financial sector or as a cause of the crisis.

Applying that to china is a mistake.

Where the risks are in china are in pollution and corruption.

The risk of an environmental disaster that casts concerns.

It is threatening people all the way over to the top of the communist party.

Policies solutions may not happen at the time they need to.

Point when we.

Tell me then about alibaba.

They are expected to file for the ipo here in the u.s. very soon.

It will be treated here on u.s. exchanges.

Would you not advised the all too by alibaba given what you just saw in china?

He just had a very big ipo of a port company.

The ipo had to be cut in half in hong kong.

Pricing was very weak.

I am not sure it'll necessarily transferred to alibaba.

I think it is very wise to pay close attention to a valuation what you are actually paying or.

Alibaba has a good reputation in china.

It is very interesting.

On the whole, my feeling is that stocks and china are probably something to avoid.

Thank you for being here.

Coming up, did you ever think

This text has been automatically generated. It may not be 100% accurate.


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