Chinese leader Xi Jinping assured U.S. President Joe Biden on Friday that he didn’t want war in Ukraine, but that he doesn’t approve of sanctions, either. During the highly anticipated call, Biden warned Xi of “implications and consequences”, should China move to provide support for Putin’s war. Over the past week, China has appeared to signal more distance between itself and Russia, saying it wants to avoid being the subject of sanctions. When it comes to economic issues, Beijing already has a lot on its plate. It took one of the biggest stock-market routs in its history, but Xi may finally be heeding the concerns of international investors. A sweeping set of promises to make regulation more transparent and predictable may suggest an appeal to investors abroad after the country was lumped in with Russia as “uninvestable.”
Future Wealth’s View
China has always been adept at playing both sides till someone calls their bluff. They got away with spreading Covid and repeatedly denied it until it came to roost in their own country – several parts of China are now on lockdown from Covid while the US is going maskless in city after city. Likewise, playing along with Russia works until it work doesn’t anymore.
For investors, these are real world lessons on our own portfolios. Whether your portfolios are set up to follow a clear plan or is being randomly scattered with buys and sells on stocks that suit your fancy, is a true test of the robustness of a portfolio. In the end, much like China is realizing, one can’t play both sides to suit the times. But, it is difficult to accept the truth.
Scott Peck’s famous quote – “Life is difficult. This is a great truth, one of the greatest truths. It is a great truth because once we truly see this truth, we transcend it. Once we truly know that life is difficult—once we truly understand and accept it—then life is no longer difficult.”