For the first half of my career, the idea of investing in China could be dismissed as absurd. How should one invest privately held funds into a system that disregards typical private property rights? Yet China proceeded to navigate rapid economic growth that attracted the envy of the world and with that envy came foreign capital.
Many high-quality U.S.-based companies have invested heavily in China, most notably Apple. I have never found this feature particularly troubling, as companies regularly invest as active participants where passive investors should fear to tread. But the question continues to arise about the investability of the Chinese market.
Samuel Quesada, the witty and thoughtful host of "The Pod is Cast," is extraordinarily well-versed in military history. His view of the rivalry with China is not as optimistic as my fellow capitalists. He sees nothing friendly in this global competition. Rather he points to the nature of countries as entities that view all others as vassals or enemies. He is a difficult foe to top in argument.
If he is correct, then the continuing emphasis of putting more capital to work in China seems naive. The likely pathway forward is not towards collaboration. Hong Kong seems to be Exhibit A supporting Samuel's dark view of China's increasing and relentless animosity to liberalism. The past pathway has been a function of China fast-tracking to some type of technological parity.
As Canada dials its total investment commitment in China to 17%, I think they could use less business school professionals and more thought leaders like Samuel. As for me, I'm going to let his military framework give me a deep pause before I jump into any ownership of Taiwan Semiconductor (TSM) as I question whether the current political climate in the U.S. has any real conviction about protecting allies so physically close to China.
No comments:
Post a Comment