Wednesday, April 27, 2022

Why are Foreign investors ditching China?

 There are many factors. Here are some of them:

1. Zero Covid worked until it didn't there in China.

In other words Zero Covid worked at first because the contagion level was manageable in previous variants. However, this is no longer true. Omicron might be 6 times more contagious than any previous variant at present. So, now Zero Covid is a complete disaster for China. Why?

Because Zero Covid also means Zero immunity to Any Covid Variants at all for all Chinese people in China. Yes. it is true that within a year or more because of exposure to Omicron and other variants you might have more immunity to all variants in China. But, what if this lack of immunity creates further bad variants in China? This is a Worldwide Risk at present caused by Zero Covid long term policies by China at this point.

So, China is an Omicron Variants disaster area and will be likely in various regions of China for at least the rest of this year and many millions (at least 3 million Chinese especially those over 65 likely will die) (whether this is ever reported by China or not).

2. China is a long time Ally of Russia.

Communism started in Russia and then moved to China during the 20th Century under Mao. And like Russia Mao killed millions and millions of their people by starvation for not being communist enough along the way. 

But now, Chinese state capitalism is unfair to the capitalism practiced in the free world along with what just happened in Russia with Western corporations like Netflix abandoning Russia entirely. A similar event is now taking place as Western Corporations abandon China one by one. This is taking eventually likely all foreign investments (sooner or later out of China). 

Here's one example of what happened because of Netflix pulling out of Russia. First, they lost 700,000 Russian subscribers when they pulled out of Russia. Then add the 200,000 subscribers they lost after they did this which is a loss of almost 1 million subscribers. Now, they expect to lose another 2 million subscribers in the western world on top of the 1 million they already lost which is a total of a loss of 3 million subscribers. This is not good for Netflix's bottom line.

Similar things likely are happening now in China that just happened in Russia as corporations leave to avoid the Rush if China attacks Taiwan.

So, a new polarization is now extending to all business separating the Western world more fully from both China and Russia. However, on a purely military level this is a very bad omen because it increases the chance of nuclear war between Russia and China and the rest of the world.

When people are in business together there is less chance that they will have nuclear wars. This is the long term problem I see for mankind as foreign investors divest themselves from both Russia and China in the coming years.

No comments: