Thursday, August 27, 2015

The Chinese Sky is Falling!

The Chinese Sky is Falling! Better Run and hide under a Rock!

Now, for what really happened. Pretend for a moment that Communist China is a big VC firm. To keep Chinese money invested at home they decide on a business and job creation spree.

Except 30 years ago there was not many ready-made-businesses. So they kind of invented a few which in turn did not really have plans to make profits.  Short-term, it goes really well as they get 10% economic growth, jobs are created, and middle class Chinese invest money in China.

Than after 30 years with not enough consumer spending growth in China to create more real jobs for non-zombie companies everything goes poof to the point where China now will only see about 3% economic growth.

Gee, you mean China will along with US VCs invest in those firms that have a solid plan for profitability in 3 to 5 years?

Folks, the sky is not falling as there still is plenty of rich middle class Chinese with money to burn in the investment markets. Change is good not bad.