A lot of investors have recently shown great confidence in China as the new growth theme in the investment world.

If you are among these investors you might want to listen to some warning voices that claim China to be a bubble.

At my long-time favourite asset manager GMO,  I found the most comprehensive summary of the dangers investors face in China these days:  China's Red Flags (free registration required)

The author, Edward Chancellor, first explains the characteristics bubbles throughout history shared and then compares then mirrors these characteristic to the economic situation in China.

Let me tell you one thing, it does not look good!

Similar to GMO I believe that asset prices in China have shot up too much and investors should be careful when investing there.

 Tim du Toit is the editor of Eurosharelab. Kindly note that this blog is published for information purposes and is not investment advice. Please refer to our disclaimer.

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