China is Fraught with Contradictions
The first of our expert opinions starts with Litman Gregory, who is one of our key research partners. In our most recent quarterly investment commentary, published last week, the analysts at Litman Gregory discuss two big recent decisions by the Chinese government. First, to take over the private education companies within China and second, to manage the debt of a huge private real estate company, Evergrande. Jeremy DeGroot points out that China has two problems to solve: “goal to reduce income inequality and, at the same time, to also reduce the leverage and size of the property/housing sector of its economy.”
China Wants More Control
The investment analysts at American Funds, also known as Capital Group, view what is happening in China under the lens of a government that wants more control. They sound a more opportunistic tone as they take a point of view that sees plenty of opportunity in the country.
China’s Evergrande Company Presents Risks and Opportunities
Finally, Michael Kass at Baron Funds strikes a pessimistic tone about what is happening with Evergrande and explains how they have kept away from these types of companies. In spite of the threats, Mr. Kass maintains some investments in China and explains his reasoning.