Shorting and being bearish on the RMB has been tough, remember what happened 10 years ago. Fu Pengye is interesting, especially as an economics expert, he should somewhat understand how the RMB operates. The RMB doesn’t really resonate with global exchange rates.
Manufacturing started relocating about 13 years ago, during Obama’s administration, the US teamed up with allies to shift manufacturing from home to Southeast Asia, India, South America, and other regions. Around 13 years ago in spring and summer, it was really grim, with unemployed people everywhere. Most news back then focused on factory relocations, with commentary on how many industries were shutting down daily. But coincidentally, mobile internet and e-commerce quickly rose, and the domestic economy bounced back rapidly. The originally relocating companies paused their plans, and with increased production demand, they not only didn’t move but also expanded their capacity. Especially Apple, which moved its entire supply chain back to the domestic market, training a large number of manufacturing talents. Apple’s sales surged at that time, leading to a supply shortage, and the intermediary market saw a labor crunch, with each worker earning 10,000 to 20,000 RMB in commissions after a month of work. Since then, the domestic economy has soared, with related industries developing rapidly.
In the short term, the fundamentals of the domestic economy seem fine, but with AI continuously evolving, the rise of unmanned factories is putting pressure on the labor market. Combined with a long-standing dual economic distribution system between urban and rural areas, we should expect some kind of uncontrollable slowdown at some point in the future.
Moreover, in recent years, there hasn’t been complete data statistics, and no one knows the extent of the negative impact on the economy from the real estate downturn and the pandemic.
It’s unlikely to collapse completely, but the economic pressure should persist for the long term, maybe ten years, maybe twenty.
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