China, more than most (if not, all) countries has the infrastructure to absorb moolah and convert it to plant and equipment. After all, China's now the USofA's manufacturing belt. If not China, then who will make physical investment? China has oodles of moolah, yet Joe Snowpack was limited to real estate, until Beijing "told" them to buy stocks. And, boy did they. But not blue chips, but Blue Books. Gad.
Since the first draft of this missive, we've yet more news. What's interesting, IMHO, was that as I began reading, the bell called "wealth effect" rang in my lower brainstem. Imagine my shock and awe when later the report invoked same. An economics/business reporter who's got some chops!!!
Because China's wealthy suffered most of the stock market losses, sales of designer luxuries from Western European and American brands could slip. "It's concentrated among the wrong people for a lot of these Western companies," said Brian Buchwald, the co-founder and chief executive of Bomoda, a consumer research company in New York and Shanghai
I wonder when Angela will be taking meetings with MB? Greece is one thing, but such a large sink for high-end cars is quite another.
In 2014, German luxury carmakers and premium brands Porsche, Mercedes Benz, BMW, Audi and Volkswagen had record vehicle sales worldwide and in China. Once again, China contributed most to the growth in global car sales although the Chinese car market expanded slower in 2014 than in preceding years.
Just watch what happens to the renminbi/yuan if China's domestic economy goes into the weeds. I wonder whether Angela will convene with the ECB to punish Beijing??? ("But, but, but... you can't devalue the yuan!!!") I bet she wishes she could. Exporters are always, and I do mean always, hostage to their importers. Especially ones who control their currency. Now you see why the Euro was a Berlin (and a bit Franco-) scam? Angela seems deaf to that reality. First Greece, now this. Heavy is the head that wears the crown.