The David Lin Report Sep 19, 2026 39m 11m saved
With Shaun Rein, founder and Managing Director of the China Market Research Group and author of "The Split: Finding the Opportunities in China's Economy in the New World Order"
Chinese households are sitting on about $20 trillion of savings. Somewhere between 7% and 10% of the country owns equities, against about 70% in the United States.
The usual explanation for weak Chinese consumption is that people have run out of money. Shaun Rein's explanation is that they have the money and will not put it anywhere, because apartment prices in the biggest cities are down 30% to 40% and the stock market has a corruption problem the government is only now prosecuting.
"So the world should in many ways thank China for saving the world's oil reserves."
Shaun Rein, founder and managing director of the China Market Research Group, on The David Lin Report, ran the surveys that asked Fortune 500 companies what hurt most about operating in China, advised Scott Bessent when the current Treasury Secretary was still at Soros, and sat down with Ford's Jim Farley before COVID to tell him electric cars were coming.
The full interview is covered here so you can skip it. 39 minutes of audio, 28 minutes of reading.
Here are the 18 calls that matter.
Key Takeaways
China cut oil imports hard enough in Q2 that Rein credits it with keeping crude near $100 instead of $120
He puts the cut at the equivalent of India's entire daily import bill
Chinese households hold $20T in savings and only 7–10% of the country owns equities
In the United States he puts equity ownership at about 70%
China's Treasury holdings have gone from roughly $1.2–1.4T to about $600B, and he says Norway's sovereign fund is doing the same thing
A $54B bank injection is "a drop in the bucket" — he expects no large stimulus and several more years of restructuring
Chinese people aged 22 to 32 are "a lost generation", while he says teenagers are the most optimistic cohort and a better market to sell to
Nobody wants to own an apartment except at the very top — luxury homes at $40,000–$50,000 per square meter are selling, everything else is not
Ford and GM are 20 years behind on electric vehicles, and he blames Jim Farley personally for ignoring the warning
He expects Chinese carmakers to build in Canada before they ever sell in the US
China exporting deflation is the thing holding Western inflation down — if its economy heats up, he says that reverses
1. Why Oil Never Hit $120
The host opened with a chart of Chinese crude imports from the Energy Information Administration, dated July 31st, showing a sharp fall through the first two quarters, and asked whether that was the reason oil had not gone above $120 after the start of the Iran war. Rein said it was, and that the rest of the world benefited from it.
Shaun Rein on China's oil imports: the rest of the world got the benefit
So the world should in many ways thank China for saving the world's oil reserves.
Shaun Rein
He put a figure on the cut. These are his own numbers, given in the interview.
He sizes the Q2 cut at the equivalent of India's entire daily import bill
China imported about 50% less in Q2 in oil than they normally do. They were basically importing 5.5 million barrels less per day than normal. That's like taking out an entire India's imports per day.
Shaun Rein
The reason China could do it, on his account, is domestic supply and domestic power generation: the Daqing fields, installed solar and hydro, and an electricity base he says is several times the American one.
His claim is that China is 84% energy independent
And the reason China was able to do that is they're 84% energy independent. They're sitting on about 30 billion barrels of oil in the Daqing oil fields. They've installed about 2.5 terawatts of solar as well as hydro power. So China has about four times the amount of power than the United States does.
Shaun Rein
Elsewhere the effect has been the opposite. He said oil reached 100 rather than the 120 people feared, and described hotels in Thailand running 50% to 60% below normal because European tourists will not route through Dubai during the war. In the United States he said he had seen gasoline at $6 a gallon and heard of $8 to $9 in California.
He credits Chinese renewables with capping the damage
So imagine how bad the oil crisis would be globally if it weren't for China's reliance on renewable energy, David.
Shaun Rein
The other half of the reduction is the car fleet. He said new-energy vehicles, meaning battery and plug-in hybrid cars, have been 55% to 60% of new sales in China over the past year, counting Tesla alongside the Chinese brands.
2. Pump Prices, Thin Margins
Asked what had happened to Chinese gasoline and diesel prices while American diesel hit a record, Rein said they had moved but that it did not matter much, because the marginal car buyer is not buying gasoline.
Chinese pump prices rose 20% to 30% and he calls it manageable
They went up about 20, 30%, but it's not that big a deal, because again, most new car sales have been NEVs in the last couple years in China.
Shaun Rein
That is the pressure he says is pushing the foreign brands out. Mercedes, BMW and Audi have to build electric cars to stay in the market; Nissan, Toyota, General Motors and Ford, he said, are almost gone from it already.
He does not expect Toyota to still be in China in 5 years
I'd be surprised if Toyota is still in China in 5 years if they don't adopt NEVs very quickly.
Shaun Rein
The real oil exposure, he said, is industrial rather than domestic. He put manufacturing and exports at about 37% of the Chinese economy, down from about 60% fifteen years ago, and said the country had run a $1 trillion trade surplus this year — again, his own figure.
High oil prices are squeezing Chinese manufacturers' margins
And because of high oil prices, manufacturers are seeing squeezed margins. So investors need to be aware of that.
Shaun Rein
3. Where China Buys Its Oil
The host asked whether China had simply been buying from the Gulf all along, which would make the import cut less of a choice. Rein said the assumption that China depends on Iranian crude is wrong.
Iran supplied only 11% to 12% of Chinese oil
And only about 11, 12% of their oil came from Iran.
Shaun Rein
Venezuela, he said, accounted for another 2% to 3% and is now gone — in his words, the Trump administration has "stolen and plundered Venezuela's oil reserves." China does about $35 billion of trade with Iran a year and buys close to all of Iran's oil exports, but that is small next to the Gulf: he put Chinese trade with the United Arab Emirates and Saudi Arabia at $105 billion and $110 billion.
Trade with the Gulf is why China has not armed Iran
So China actually has been a good player, not just in reducing oil usage but also in not sending massive military support to Iran, again because they're very close to the UAE and very close to Saudi Arabia.
Shaun Rein
He says the American view of who China's friends are is a caricature
I think in many ways the American media and government has a cartoonish view of China's allies or relations.
Shaun Rein
4. A Trump-Xi Oil Truce?
The host raised a theory he said he had been hearing: that Trump and Xi coordinated the import cut deliberately to hold the oil price down. Rein would not confirm it and would not rule it out.
He will not dismiss the idea that the two governments coordinated
Yeah, I don't know if that's true, but I wouldn't be surprised.
Shaun Rein
He pointed to Treasury Secretary Scott Bessent saying the week before that the American and Chinese positions on Iran are closer than they are apart. The countries carrying the cost, he said, are Southeast Asian, Middle Eastern and Japanese.
Japan brings more than 90% of its oil through the Strait of Hormuz
Japan gets over 90% of its natural energy oil needs coming in through the Strait of Hormuz.
Shaun Rein
He compared the six months of war so far to 1973, when he said it took five to ten years for the world economy to recover, and described what he had seen on a trip to the United States a month earlier: consumers pulling back from McDonald's and Walmart, which he called bellwethers of a weak economy, and white-collar workers taking second and third jobs delivering for Uber Eats or driving for Lyft.
He thinks a financial crisis is being underpriced
So I think the world is underestimating the risk of a major financial crisis because of this ongoing oil problem in Iran as well as a $40 trillion US debt, as well as the fact that nobody in the world can trust Trump right now.
Shaun Rein
The tariff story he told against that backdrop runs the opposite way to the one most people expect. He said he had interviewed the chief executive of a large apparel company who moved most of his supply chain out of mainland China to Taiwan, then moved it back, because the American tariff on his categories out of Taiwan turned out to be higher than the tariff out of China.
Companies are returning to China because nobody can price the policy risk
And that's why China is just going from strength to strength in manufacturing. It's not overcapacity. It's not a Chinese government trying to destroy manufacturing everywhere. It's they have the best ecosystem, they have efficiency.
Shaun Rein
He was explicit that this is a long-run call and not a description of conditions now.
Retail sales growth is running at about 0.3%
Retail sales are only hovering growth about 0.3%, fixed asset investment is very low.
Shaun Rein
5. Six Months of Reserves
The host said he had read that China still holds more than a billion barrels stockpiled and asked whether a return to normal buying would push oil up again. Rein said the stockpile buys about half a year and that the risk sits elsewhere.
He puts China's remaining cushion at roughly 6 months
Yeah, I think China easily has 6 months more of oil.
Shaun Rein
What worries him is the war itself, which he called unwinnable, and what Israel's prime minister does next. He said Benjamin Netanyahu is "sitting in Trump's ear" and had been weighing strikes into Turkey and Syria, and accused him of picking fights abroad to take attention off corruption investigations at home. He made the same accusation about Trump over Epstein.
His read is that both leaders are using conflict as a distraction
So I think you have a lot of bad politicians who are just trying to distract the world with crazy behavior.
Shaun Rein
6. Selling the Treasuries
The host put up the Chinese ten-year government bond yield, at its lowest since 2025, against a US ten-year at 4.95%, the highest since 2023, and asked why Chinese bonds have gone one way while the G7 went the other. Rein answered with the flows.
China has cut its Treasury holdings to about $600B
Well, you can see China has reduced holdings of Treasury bills from about 1.2, 1.4 trillion US dollars down to about 600 billion. They're trying to divest from United States holdings.
Shaun Rein
He said Norway's sovereign wealth fund is doing the same, and that the cause is not Trump alone: he named Biden as well for weaponizing both the dollar and export controls on technology. He cited Bessent telling countries to buy hundred-year Treasury bills or face economic coercion, and described what he says officials in the Caribbean and Latin America have been told.
He says the threat reaches officials' children and grandchildren
If you don't heed that the United States is in control of the Western Hemisphere, and if you don't stop doing business with China, then we're going to sanction not just you as an official, but also your family members.
Shaun Rein, relaying what he says Secretary of State Marco Rubio has told officials
For a politician on a small island, he said, losing dollar bank accounts and the ability to transit through Miami is losing access to the rest of the world. That fear is what he thinks is repricing the two bond markets.
His argument is that China now looks like the more predictable counterparty
you might not be able to trust them completely because they might have a different government system, arguably a different value system, but they're a lot more reliable than the United States right now under Donald Trump
Shaun Rein
7. BRICS and an India Thaw
Asked what Xi wants from the BRICS summit and from his meeting with Trump a few weeks later, Rein said the Russia part is theater with a real basis, since the two countries have been pushed together, and that the interesting question is India.
He says the Russia relationship is survival, not affinity
So I think Russia and China have gotten close as a matter of survival and they're basically going to show the world that they're strong together and they're almost like iron brothers.
Shaun Rein
His evidence that the affinity runs the other way is where the Chinese elite sends its children.
Chinese leaders send their children to American universities, not Russian ones
Xi Jinping sent his daughter to Harvard, didn't send his daughter to Russia or the Soviet Union. In fact, I haven't heard of any elite families sending their kids to the Soviet Union or Russia since 1980. They all sent them to the United States. Deng Xiaoping sent his grandkids to Duke University. Hu Yaobang sent his grandkids to Yale.
Shaun Rein
On India he dated the freeze to the Ladakh border clash seven or eight years ago, in which a couple of dozen Indian soldiers and a handful of Chinese soldiers were killed. India has banned about 80 major Chinese apps including TikTok; China, he said, is holding back rare earths, excavators and magnets. Visas and direct flights have reopened.
He thinks India has more to lose from the standoff than China does
But I think the reality is India needs China right now.
Shaun Rein
India expected to inherit the manufacturing that left China, he said, and Trump has made clear he does not want that either.
8. No Chinese EVs for the US
Asked what it would take for Chinese electric cars to enter the American market without punitive tariffs, Rein gave the shortest answer of the interview.
His answer on what opens the US market to Chinese cars
I think it would take a bribe to his family, basically.
Shaun Rein
The substantive reason he gives is competitive rather than political. He put the American manufacturers two decades behind and said tariffs are the only thing keeping them upright.
Ford and GM are 20 years behind on electric cars
I think the reality is that the Americans, like Ford, like GM, are 20 years behind the Chinese when it comes to NEVs.
Shaun Rein
He made it personal. Before COVID he spent a couple of hours with Jim Farley, Ford's chief executive, telling him electric cars were the future and that Ford had to enter the category. Seven years later, he said, Farley is calling for protection.
He blames Ford's chief executive for ignoring the warning
So I consider Jim Farley a failure. He failed shareholders of Ford.
Shaun Rein
He added that 70% to 80% of Ford's sales, as he understands it, come from F-150s and other pickups sold in Texas. Canada is where he expects the Chinese brands to land instead: he praised Mark Carney, noted that the Canadian and Chinese militaries met officially the week before for the first time in eight years, and said BYD or Geely could open factories there.
He expects Chinese carmakers to build in Canada, not sell into the US
And so I think you could see Chinese NEVs from a company like BYD or Geely opening up factories in Canada, creating jobs in Canada, and selling NEVs there.
Shaun Rein
9. A K-Shaped Consumer
The host asked how Chinese consumer price inflation came in at 0.8% year on year in August. Rein said the honest answer is that demand is weak, and separated the top of the income distribution from everyone below it.
Apartment prices are down 30% to 40% in the largest cities
First, real estate prices are still down 30, 40% in tier 1 cities. Two months ago I was in Hunan and Zhengzhou province, prices were down 60 to 70% there.
Shaun Rein
Pay has not moved either: companies have not raised salaries and the Chinese New Year bonuses in February were poor, so he dates the collapse in middle-class confidence to the six or seven months since. The wealthy went the other way, helped by A-share and Hong Kong market gains.
He describes a K-shaped recovery with the wealthy on the upper arm
We're seeing a K-shaped recovery. So the wealthy are actually increasing their confidence — they benefited from the stock market gains, the A-share and Hong Kong over the last year, they're the ones that are benefiting from the AI play.
Shaun Rein
That led to the pair trade he offered for anyone who likes the American AI names.
His Chinese substitutes for the US chip and model companies
If you think Nvidia is good in America, then you should be investing in SMIC and Huahong and Cambricon in China. If you think Anthropic and OpenAI are good in America, you should be looking at Kimi and Alibaba Qwen and DeepSeek in China.
Shaun Rein
Everyone else is postponing large purchases.
Car sales fell more than 20% last month
They're taking a wait-and-see attitude on big ticket sales, which is why auto sales last month dropped over 20%.
Shaun Rein
10. Gold Beats Property
Asked where the money goes if the dollar is not trusted, Rein said the renminbi will become a reserve currency without becoming a big one, and that gold takes the rest.
He caps the renminbi at 3% to 5% of a nation's reserves
China is going to become a reserve currency, but it's not going to account for more than 3 to 5% of a nation's holdings. I think it's going to be a lot more gold.
Shaun Rein
The names he likes are the jewelers rather than the metal: Lao Feng Xiang and Chow Tai Fook in China, and Richemont on the strength of Van Cleef & Arpels, Cartier and watch brands including A. Lange & Söhne and Vacheron Constantin.
The host asked whether the property downturn has changed the cultural habit of storing wealth in apartments. Rein said it has, for at least a decade, and named a second fear on top of the price falls: tax. He said China is already applying what he believes is a 20% levy on wealthy people's offshore trusts, and that an annual property tax is widely expected.
Nobody wants to own property, and it is still too expensive
I think right now nobody wants to hold real estate — prices are too far down.
Shaun Rein
Even after falls of 30% to 40%, he said, apartments are out of reach because incomes and bonuses have not risen in six or seven years. The exception is the very top: homes at $40,000 to $50,000 per square meter are selling well, which is why he sees something in China Resources and in Hang Lung, the developer behind the Plaza 66 luxury mall in Shanghai.
11. Waiting on the A-Shares
If not property, then what. Rein listed insurance products, time deposits and gold, and explained why a deposit paying almost nothing still satisfies a Chinese saver.
A 1% deposit beats deflation, which is all savers are asking for
The reality is time deposits are only giving you like 1% at most, but if deflation is even or even down 1, 2%, a lot of Chinese view that as a win because they just don't want to lose money.
Shaun Rein
His optimism about Chinese equities is built on that pile of idle money and on the clean-up at the China Securities Regulatory Commission, the market regulator he compares to the SEC. He said its former vice chairman was jailed for life the week before, and named the CSRC, customs and tax as the three parts of the government with the worst corruption record.
Equity ownership is about 70% in the US and 7% to 10% in China
You have to remember in the United States about 70% of people own equities. In China, it's only around 7, 10%.
Shaun Rein
The pool he thinks could move is 500 to 600 million people
So there's still, if you can create confidence in the trustworthiness of the equity markets, you still have 500 million, 600 million Chinese who have the money, who are putting money now into time deposits and gold, who might go into equities.
Shaun Rein
He described himself as cautiously optimistic and said he is still waiting for the catalyst.
12. China Efficiency
The host listed the August trade data: exports up 25% in dollar terms year on year, exports to the United States up 34%, imports up 17%, exports to the European Union up 6.6%. He asked what is driving it through a tariff war. Rein's answer was speed, and he argued it from his own week.
His term for the advantage is China efficiency, not China speed
So some people call it China speed, I like to call it China efficiency.
Shaun Rein
The examples were domestic. A repairman was at his house within fifteen minutes of a call about a broken stove, and a second one an hour later when the first could not fix it. A car repair shop quoted him within three minutes of his arrival and finished the job in two hours. He contrasted that with a friend in Oregon told to wait 30 to 60 days for a Tesla repair.
On the trade deficit itself he rejected the word overcapacity and pointed at the Germans who used it.
He calls the overcapacity framing hypocrisy
Now there is a huge trade deficit, and the Americans like to call it overcapacity, and so did the Germans — but they didn't call it overcapacity when Germany was dominating exports with BMW, with Siemens, with BASF, with Bosch.
Shaun Rein
His structural point is that the deficit is a policy choice by Washington: China wants to buy things America has stopped selling.
He puts a number on the semiconductors China used to buy
China used to buy $300 billion US a year of semiconductors, last year Jensen Huang said Nvidia's market share went to zero and he lost $18 billion because the Biden regime and the Trump regime both slapped export controls on chips sales to China.
Shaun Rein
The retaliation ran through agriculture. He said Chinese purchases of American farm goods, which had been $20 billion to $30 billion a year, fell to seven and a half billion dollars of soybeans last year, and that the roughly $18 billion China has now agreed to buy is still below what it bought under Biden.
13. A Lost Generation
The host cited a 17.9% youth unemployment rate as of July and asked what happens to the young people, given that the automation push was supposed to be a response to a labor shortage. Rein said the shortage was real and is the reason the robots exist.
His firm asked Fortune 500 companies their biggest China problem and got one answer
The majority of them said it was HR.
Shaun Rein
He put the question to Fortune 500 clients between roughly 2008 and 2017, he said, and the job market was hot enough that new hires were poached within six months to a year. His own example: he promised a graduate a 40% raise every year for five years, paid the first one, and she quit the same minute on being told that was it.
He says Beijing scrapped the one-child policy at least 20 years too late
They were probably 20 years, if not more, too late on getting rid of that policy.
Shaun Rein
What companies did instead was automate, which is why he says China now leads in both building robots and deploying them — hotel delivery robots and fully robotic coffee shops, rather than humanoids. The bill for that is the cohort now leaving university.
People aged 22 to 32 are a lost generation, on his account
What I would say is people between the age of 22 and 30, 32 are a lost generation. They suffered from the geopolitical tension between the US and China, they weren't able to get good jobs because of COVID.
Shaun Rein
He said a boom would not rescue them, because they lack the skills and the habits. Teenagers are the opposite case: he cited his son, Tom Rein, who the host had interviewed a few months earlier, and a peer group planning three-person AI companies instead of corporate careers.
The investable consumer is the teenager, not the 20-something
So if you're looking at companies that sell to the 20 year olds, dead. If you're looking at companies that are selling to the teens, it's actually a really booming market.
Shaun Rein
14. $54B Is a Drop
The host put up China's $54 billion injection into the banks and asked what the central bank is trying to achieve. Rein called it too small to matter and explained what it is actually for.
He calls the injection a drop in the bucket
Yeah, it's a really small stimulus, 54 billion, it's like a drop in the bucket for helping the economy.
Shaun Rein
The purpose, he said, is repairing bank balance sheets as non-performing loans rise. Cheap money does not help when nobody wants to borrow: companies will not take a loan if they cannot see a way to make money with it, and the banks themselves cannot earn anything while property and lending volumes are dead.
His description of the economy is muddling through, not collapsing
We're still right now in a muddle-through stage. The economy is weak but it's not that weak. People are still able to feed themselves, get an education, see a doctor, so it's not that bad right now. The anxiety is less than it was 3 years ago.
Shaun Rein
He expects no large stimulus, because he thinks Beijing has accepted several more years of pain to shift the economy from property to what it calls new productive forces, meaning batteries, renewable energy and cars. He is candid that those are not yet big enough to replace what property was.
15. Factories Move Offshore
Asked whether exports are the primary driver of growth, Rein said no: they are a pillar rather than an engine, and the American piece of them is small.
Exports to the US are about 2.5% of the Chinese economy
Only about 2.5% of the economy is based off of exports to the United States.
Shaun Rein
What he expects instead is Chinese companies manufacturing inside their customers' countries, in exchange for those countries staying open to Chinese investment. BYD has taken over Ford's old plants in Thailand, hires Thai workers and now leads the Thai car market. He expects the same in Canada if Carney holds to his position, and said Chinese firms in Africa are opening factories in Kenya and Ethiopia rather than only extracting raw materials.
Western Europe and the United States he wrote off, and gave three examples of what he says happens to Chinese money there: TikTok, which he said followed American law and was "stolen by Larry Ellison and the Trump regime"; Pirelli, where he said the Italian government forced Chinese investors off the board of a tire maker on national security grounds; and Huawei, which pulled back in France over the 5G and 6G rollout.
His travel diary is the evidence he offers for the rest of the world derisking
I'm set to go to Australia soon, I'm going on a trip to meet with hedge funds, because Australian investors are saying we need to derisk from the United States right now and go back towards China.
Shaun Rein
16. If the Consumer Returns
The host asked which global asset moves first if China ever does stimulate consumption and property in earnest — copper, oil, the yuan, Treasuries or Chinese stocks. Rein said commodities, and said China is buying them for reasons that have nothing to do with the cycle.
He likes copper, lithium and chrome ore on national-security buying
I like copper, I like lithium, I like chrome ore. China, from a national security standpoint, is trying to buy up all the raw materials as much as possible
Shaun Rein
Natural resource producers are doing well even while Chinese refiners work on thin margins, and he expects Beijing to keep supporting the sector because access to raw materials decides who wins over the next several centuries, in his phrase.
The second-order move is retail. Retail sales grew 10% to 15% through most of the 2010s, he said, and the money to do it again is sitting in deposits.
Chinese households hold $20T of savings
They're sitting on 20 trillion US dollars of household savings.
Shaun Rein
He was specific that this is not a discounting story. Ralph Lauren, Adidas and Coach are selling well in China now, and none of them is cheap.
What sells is value, which he distinguishes from cheapness
The Chinese will buy if they see value — it's not just cheap.
Shaun Rein
For footwear he named Hoka and ASICS as the ones working and said to avoid Nike.
17. The Tech Stack Splits
The host said Nvidia alone is worth more than every Chinese stock combined and put the valuation gap between Chinese and American technology companies at 10 to 15 times, then asked whether that discount is still deserved. Rein said no, on the grounds that the customer base is about to change.
He says countries are being made to pick a technology stack, and many will pick China's
The United States has made it clear to the world, you either choose the American tech stack or you choose the Chinese tech stack. And I think you're going to see more and more places in the Middle East, in Africa, in Southeast Asia are going to choose the Chinese tech stack because it's cheaper and they're not as worried about sanctions.
Shaun Rein
His illustration was a Gulf investor watching the anger at Saudi Arabia on the anniversary of the September 11 attacks and deciding not to build a business on American technology. He said sovereign wealth funds that had written China off since 2020, Norway among them, are now asking about it again. Norway, he said, closed its China offices.
Chinese technology valuations are too low, in his view
So I think valuations are way too low in Hong Kong and in China.
Shaun Rein
He thinks American dominance of the technology stack is already over
The United States is not going to dominate the tech stack anymore because they've weaponized it too much and are using too much coercion, and China is too powerful now that they can't be forced down, and they're going to create an alternative tech stack system for the rest of the world.
Shaun Rein
The sanctions, he argued, produced the thing they were meant to prevent: restrictions on Huawei, ZTE and TikTok forced China into building its own, and he said China would have been content to let America lead on chips and artificial intelligence ten years ago.
18. Deflation as an Export
The closing question was which is the bigger risk to world markets — a Chinese collapse or a sudden Chinese reacceleration, given that weak Chinese demand has been holding Western inflation down. Rein agreed with the premise.
China has been exporting deflation for 10 years and would reverse it
I think China's been a deflationary pressure on the rest of the world for the last 10 years — real estate is down, incomes in a lot of places cut salaries 20%, CPI is at around zero. So if China's economy were to heat up again, they would start to export inflation again like they did in the 2008-2010 period.
Shaun Rein
He blamed the whole arrangement on the trade war and returned to the Treasury Secretary he used to advise.
He says Bessent formed his view of China at Soros and never revised it
I used to advise Scott Bessent, the Treasury Secretary, when he was over at Soros, and he viewed China as weak and about to collapse. He thought that because China was technically communist, you couldn't trust any of the numbers, that it was weak and it was destined to fail.
Shaun Rein
His bottom line on the policy
We need to end the trade war. Otherwise, we're going to have more problems for all of us and a very select few cronies in a K-shaped recovery in the US are going to win.
Shaun Rein
Bonus Insights
Containing China is harder than the war he already calls unwinnable
But trying to contain China is even more unwinnable than the unwinnable war that they've gone after in Iran.
Shaun Rein
He gives about 50 keynote speeches a year
Asked where people can follow him, Rein named LinkedIn and Twitter, said the better option is to hire him for a keynote, and put his speaking schedule at about fifty a year. He had just come back from the United States and was leaving for Australia.
Diamonds are the one thing he will not call a nugget
Reaching for a metaphor about picking opportunities in a weak market, he started to say diamonds, stopped himself on the grounds that laboratory-grown stones have ruined the economics, and switched to gold nuggets instead.
Rein's bottom line is that the Chinese economy is weak now and worth owning later: retail sales are barely growing and confidence has cratered, but the savings, the manufacturing base and the alternative technology stack are all still there, and he expects the rest of the world outside Western Europe and the United States to keep moving toward it.
Products, Companies & Tools Mentioned
China Market Research Group (His own Shanghai firm, whose interviews with Fortune 500 companies between about 2008 and 2017 produced the finding that hiring and retention, not corruption, was their biggest China problem)
BYD and Geely (The two Chinese carmakers he expects to open plants in Canada; BYD has already taken over Ford's former plants in Thailand and leads the Thai market)
Ford and General Motors (He puts both 20 years behind on electric cars, says Ford depends on pickup sales in Texas, and calls Jim Farley a failure for ignoring his pre-COVID warning)
Toyota, Nissan, Mercedes-Benz, BMW and Audi (The foreign carmakers he says must build electric cars to survive in China; he would be surprised if Toyota is still there in 5 years)
Tesla (Counted alongside the Chinese brands in the 55% to 60% of new sales he says are electric, and the subject of the Oregon repair wait he uses as his US counter-example)
SMIC, Hua Hong and Cambricon (The Chinese chip names he offers to anyone who likes Nvidia)
Kimi, Alibaba's Qwen and DeepSeek (His Chinese substitutes for Anthropic and OpenAI)
Nvidia (Worth more than every Chinese stock combined, per the host; Rein cites Jensen Huang saying its China market share went to zero at a cost of $18 billion)
Anthropic and OpenAI (The American model companies he uses as the benchmark for the Chinese ones)
Huawei and ZTE (The sanctions on both, he argues, are what forced China into building its own technology; Huawei pulled back in France over the 5G and 6G rollout)
TikTok (Banned in India and, in his words, "stolen by Larry Ellison and the Trump regime" in the United States)
Pirelli (His example of Chinese investment being unwound in Europe: he says Rome forced Chinese shareholders off the board of the tire maker on national security grounds)
Lao Feng Xiang and Chow Tai Fook (The gold jewelers he still likes, on the view that Chinese and Indian savers trust gold over equities and property)
Richemont (He expects it to do well on Van Cleef & Arpels, Cartier and high-end watches including A. Lange & Söhne and Vacheron Constantin)
China Resources and Hang Lung Properties (The two property names where he sees green shoots, Hang Lung as the owner of the Plaza 66 luxury mall in Shanghai)
Ralph Lauren, Adidas and Coach (His evidence that Chinese consumers buy on value rather than price — all three selling well at premium price points)
Hoka and ASICS (The footwear brands he says are working in China, against Nike, which he says to avoid)
McDonald's and Walmart (The two American bellwethers he says consumers are now stepping back from, which he reads as a sign of real distress)
Uber Eats and Lyft (The evening work he says white-collar Americans he interviewed are taking on top of full-time jobs)
Siemens, BASF and Bosch (Named with BMW as the German export champions nobody called overcapacity at the time)
Norges Bank Investment Management (Norway's sovereign wealth fund, which he says is cutting US exposure and had closed its China offices)
China Securities Regulatory Commission (The market regulator he compares to the SEC; he says its former vice chairman was jailed for life and names it, customs and tax as the most corrupt parts of the government)
Books & Resources Mentioned
The Split: Finding the Opportunities in China's Economy in the New World Order – Shaun Rein (His book, which the host flagged at the top and the end of the interview)
EIA China oil import data (The Energy Information Administration series, dated July 31st, that the host put on screen to show the fall in Chinese crude imports through the first two quarters)
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