Is their economy that weak?
To be sure, both Taiwan and Thailand are desperate to bring back Chinese tourists. Here in Jomtien, south of Pattaya and an hour south of Bangkok, as far as I can see, Thailand is devoid of Chinese tourists.
Aussies, yes… Russians, by the boatload… Kiwi’s, all over… Chinese, nope.
Chinese are prolific spenders.
They clearly, on a per capita basis outspend the Aussies, who are old, retired men and Russians who are… well… cheap.
On a per capita basis, the Chinese are the best tourists in Asia. They behave, spend money and are fun loving. They go on tours, scuba dive, fish and go to amusement parks. They love malls and restaurants. So, what’s wrong with gambling?
China’s biggest fear in capital flight.
As the article says, China’s Achilles heel is capital flight. In our opinion, this was why their Covid response was so… Chinese.
Aside from American investors and outsourcers, no one, certainly no one is Asia but especially the Chinese themselves, trusts China’s government. The principal reason is China’s government is not trustworthy.
It’s easy to launder money in a casino.
It’s simple. Buy chips with Yuan and cash your chips in Thai baht.
In Thailand, you must provide a passport to exchange money. Since trading margins on currencies are thin, and Yuan and not a great black market currency, there’s not a huge black market for currencies.
The Thai government has become increasingly efficient in cracking down on crime by people on tourist visas.
For Israeli’s, it is predominately illegal business, money laundering and passing counterfeit currencies. The Chinese though don’t get into that many illegal activities as the Chinese government heavily monitors their citizens.
But, unfortunately for the Chinese gambling is not, or perhaps WAS not, an illegal activity.
Back to our original question. Is China’s economy that weak?
We don’t know but giving governments (All of them) penchant for constant lying and disinformation campaigns, anecdotal evidence is all we have.
Here are some points we look at.
- Currency flight issues.
- China’s collapsing real estate market.
- The lack of “out of China” tourism.
- Their hard stance in trade deals.
- China’s difficulty in reopening post covid.
- Their plateauing energy consumption. https://tinyurl.com/3fapc9cf
Our take is to ignore what they say and focus on what they do. Individual Chinese are buying gold by the boatload and their government is encouraging it. Leaving China with it? Not on your life.
