Events this week speeds up even beyond the lightening pace of last week and it’s not going in a good direction, boys and girls. The word decoupling doesn’t seem to do justice any more to the trends we are witnessing. The NPC session ended, with no GDP target being announced. While China’s economy is obviously being hammered, like economies around the world, the goals the party set for itself of extinguishing poverty by the end of this year, we can assume will still be announced as having been met. The other NPC event was the tabling of the national security law for Hong Kong, a step that changes forever the arrangement for the cramped enclave. How it plays out for the territory and what impact it has on the Hong Kong economy is simply unknown at this point. And how the reaction from the rest of the world plays out is also unknown, although Trump is scheduled to speak on the topic of China sometime after this missive is put to bed. Whatever he says will be a defining moment. This is all getting dangerous. We’re moving towards a possible confrontation, and both sides appear to believe they would emerge from such an event on top. That is scary. But then again, the sun is shining, summer is here, skies are pretty clear, and who knows, maybe it will all turn out okay.
Enjoy the weekend.