How China Has Changed

China's Latest Great Leap Forward

As a fluent Chinese-speaker and frequent traveler to China, American businessman Molson Hart seems well positioned to compare China and the U.S. He did that in a viral video posted on X, which I've summarized below. In short, he says life in China has gotten radically better over the last five years, while the opposite has happened in the U.S. 

Here are his specifics: 

1. Everything is automated. You can pay for everything with the Chinese equivalent of Apple Pay. In the factories, there are robots everywhere--it's no longer a cheap labor company, 
2. Electric vehicles are everywhere. In China, 30% to 40% of the cars on the road are electric--not just Tesla, but dozens of local brands, some of which are as cheap as $10k. 
3. Cleaner air. "They fixed their air". Ten years ago, Hart says there was so much smog in Shanghai it even seeped into the airport. Today, he says, it's significantly better. 
4. They're more civilized. "Five years ago, this country was not civilized". People used to bump into you, cough in your face, drive like maniacs. Now Hart says, China is a civilized society. He says it feels like Japan now. This was partly due to a government campaign, including posters, encouraging Chinese to behave better. Hart also says automation has helped with this too, enabling the government to track KPIs and consumer complaints and make sure they get resolved. 
5. A lot fewer foreigners today. Hart's not sure why that is, but he speculates it may be due to the COVID lockdowns. He also notes that white foreigners he sees in Shanghai today are often Russian. 
6. Technology, supply chains, and ways of doing business have changed significantly in five years. Factories are "super-automated" and have their own direct links into China's equivalent of Amazon and similar marketplaces. Hart says "The speed of business and the way business works feels significantly more advanced in China than in the United States." He notes that this wasn't the case five years ago. 
7. Everything is better. Contra Western perceptions of China being dystopian (probably due to the COVID lockdowns), Hart says visiting China now "feels like I'm stepping into the future... It feels like everything has gotten better in China, it's a more harmonious society. Hart contrasts it with the U.S.: "It feels like, over the last five years, in my home country, everything got worse."

You can watch Hart elaborate in the video below, as he walks through Shanghai. 

Betting On The Trend Continuing 

If you believe things in China will continue to improve, last month in our trading Substack, we highlighted an under-the-radar Chinese stock that should benefit from that trend. That stock is up 19% since, but its still trading at a low single-digit P/E multiple, so it probably has a lot more room to run. It's also releasing earnings this week. 

You can click on the image below to learn more about that. 

In Case You Missed It

The performance of Portfolio Armor's top names and hedged portfolios has been on a tear over the last two months. You can read about that in our previous post, Hedging Doesn't Have To Be A Drag. 

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