Click here to register and join me for a free 30 September Webinar on how to reshape your China strategy. Here are some the reasons why you should attend….
IT IS one of those plays that is almost too painful to watch, but it is nevertheless disturbingly compelling: Samuel Beckett’s brilliant Waiting for Godot.
What the play is about, if you can bear to read or watch it, is the meaningless of time. The protagonists are involved in a pointless wait for something that when or if it happens will not meany anything anyway.
For me, the message in Waiting for Godot has always been this: Don’t waste your time on something pointless.
I worry that the anxious wait over the last few weeks for the Fed’s decision on whether or not to raise interest rates in September is very similar to what the two characters in the play – Vladimir and Estragon – spend all their time doing.
And ever since the Global Financial Crisis, in fact, people have been so worried about the Fed’s behaviour that they have missed a much bigger deal: China’s economic about turn.
“The wait for Godot goes on,” said Luke Bartholomew, a fund manager at Aberdeen Asset Management, on the Fed’s decision yesterday not to raise interest rates in September.
“Janet Yellen’s caution won out over some of her more trigger-happy colleagues. There’s good reason for that caution. Inflation is almost non-existent and wage growth is lacklustre.”
Why was this a waste of time for anyone other than financial and commodities traders? Because:
- Quantitative easing (QE) will not and simply cannot solve America’s long term economic problems. These can never be solved until or unless politicians get to grips with the underlying causes of the record low worker participation rate and middle-class wage stagnation.
- Some governments of countries that make up the emerging markets wasted a valuable seven years because of the capital inflows resulting from QE. Over the last few weeks they have been worried about capital outflows ahead of the rate-rise decision. All along these governments should have instead been entirely focused on satisfying basic needs.
- And, as I said above, whilst everyone waited for Godot to turn up, they missed the arrival of another character that does not appear in Beckett’s great play: The new China.
It is events in China that today matter far more than what the Fed does from now on – or, in fact, has ever done. Every chemicals company and every government that deals with China needs to ask themselves this question: Does our approach still add up?
So how do we all adapt our approach to China? I obviously don’t have all the answers, but I am keen to continue being part of the thinking that guides all of us towards some of these answers.
Click here to register and join me for free the Webinar on September 30 – China’s Economic About Turn: What It Means For the Global Chemicals Industry.