According to Double Line founder Jeffrey Gundlach, investors should think twice about placing their money into China.
In an interview with Editorials99 Finance at his California residence, the bond king said, “China is uninvestable at this juncture in my perspective.” “I’ve never made a long or short investment in China. What is the reason for this? The evidence does not inspire confidence in me. I no longer have faith in the partnership between the United States and China. I believe that investments made in China could be seized. That, I believe, is a possibility.”
Gundlach made his remarks on the eve of DoubleLine’s third annual Roundtable Prime investor event, which will take place on Tuesday.
Last year, some of Gundlach’s warnings about China came to fruition.
The government’s continuous crackdown on the operations of giant Chinese internet businesses like Didi has shaken investors in space. The Chinese government has tightened listing standards as a result of the crackdown on the country’s major digital companies.
Didi intends to delist from the New York Stock Exchange later this year, not long after a dismal initial public offering (in large part because of Chinese authorities).
Jeffrey Gundlach (right) of DoubleLine tells Editorials99 Finance about his company. China is an uninvestable country.
Meanwhile, China’s government’s broad reach devastated after-school tutoring enterprises like TAL Education Group, whose stock plummeted by about 95% in 2021.
All of this is on top of China’s continuous struggle against cryptocurrency development.
The country’s primary indexes performed poorly in 2021, indicating the country’s investing challenges.
For example, the Golden Dragon Index, which tracks the performance of Chinese mid- and large-cap equities, fell by about 50% in 2021. According to the Wall Street Journal, the total value of China’s onshore equities increased by 20% in 2021, trailing the S&P 500.
Gundlach is growing more positive about emerging economies, with the exception of China (which he no longer considers an emerging market).
“I believe that the next, and most important, step is to explore new markets. This entire period, we’ve held no emerging market stocks. We’ve also been underweight emerging market debt until very recently “Gundlach noted.