Good potential but not really inspiring confidence

The China story is an interesting one. With such a huge economy and rich heritage behind it, the potential is enormous. So is the loyalty ofthe citizens. But in a globally intertwined economy much like the one we have, no country can afford to go all out on its own. And that is the thing with China. The politics of the country and culture etc can be at loggerheads with the US and we all know very well how the US is seen as the defacto leader of the free world. And that status does not go well with a country that sees itself as an equal or maybe even better. 

The political grindings that have been going on is plain clear for all to see and is very much like two heavyweights slugging it out with each other. Both are wary of each other and bothknow that each other is finding ways to get ahead of the other and hold the 'superpower' mantle. The US after having battled it out with the fallen superpower 'USSR' in the past decadewill only trust themselves and will not want to compete with another one. Hence the obvious witholding of technology to China. China will not want to let go of their rich history, culture and way of life so as to just 'align' with US andbe seen as pals and allies. So until one relents, the posturing continues.

So is there any opportunity in China, most importantly on the economic sense and to narrow it down the stocks available in the stock market? I believe there are some good opportunities. Companies I like are those such as $NIO Inc.(NIO)$ . They have good potential and are relevant. However they are mired in geopolitical risks. That cannot be discounted. As long as China and Taiwan are standing off as they have been doing all these years, the risks will stand. Now that US is restricting technology to China, many are more on edge because they worry that when push comes to shove, China might be desperate enough to take Taiwan and we know the importance of Taiwan to the tech world. No one needs any introduction to $Taiwan Semiconductor Manufacturing(TSM)$ 

However, I believe China is smart enough to realise that war does not serve the best interests of anybody. Diplomacy is always better. And if relations between US and China warms up , that will be good for China stocks as well as global stocks. 

Thanks for reading!

# How do you view China stock rebound?

Modify on 2022-12-01 19:30

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