KKR Releases New Macro Report Discussing the “Shifting Landscape” in China and JapanOctober 12, 2015
“Looking at the big picture, our key conclusion from the trip is that
the slowdown we are seeing in
In the piece,
Chinais in structural slowdown mode, as excess debt and capacity now weigh on profits, not just GDP. Slowing Chinese GDP data seems to garner all the headlines these days, but after our most recent trip, we think the focus should be on trends in corporate profits.
Japanis no longer just a macro story; focus on the micro too. The positive macro story in Japanis – on the margin – waning. As such, we think primarily just those companies that are actively shedding assets and/or returning cash to shareholders will outperform handily from current levels.
Asiais in somewhat of a funk. Our trip reconfirmed our thesis that many EM Asia countries recently redirected their economies — potentially at just the wrong time — to take advantage of what they thought would be ongoing strength in China’s economy. However, with China’s growth now stalling amid lower commodity prices and weak inbound trade, many EM countries are now enduring weaker than expected growth, bigger deficits, and heightened political tensions.
Links to access the full report as well as an archive of our previous publications follow:
- To read the latest Thoughts from the Road, visit KKR’s web site.
- Click the following link to download a PDF version.
- Click the following link for an archive of previous publications.
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