Maybe elephants can dance
Keen readers of business books may recall one penned by Louis Gerstner in 2008 titled, Who says elephants can’t dance: leading a great enterprise through dramatic change, recounting his turnaround of IBM.
A company that was once the embodiment of American business supremacy found itself struggling with a dated culture causing it to miss out on the technology boom its competitors were enjoying. IBM was thought to be too big to change, until Gerstner showed otherwise.
In that same vein, questions are now being raised about China as its decades-long fixed asset investment driven model appears to have reached its limits and another shot of old-school stimulus that pours more capital into real estate and infrastructure is not the remedy. This explains why Beijing has not opened the fiscal taps despite some observers waiting for it to do so. Following a recent research trip which included 33 company visits across China (as well as South Korea and Japan) our conclusion is that the Chinese economy is better than feared. Admittedly, that is short of a ringing vote of confidence, but given the dominance of bearish views, it does go somewhat against the grain. Download the whitepaper for further analysis.
For more information on Antares and their funds please visit their website.