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The Chinese stock market has fallen significantly of almost 50% in recent years, causing many investors to lose confidence. This has led some to completely avoid China altogether.

In China, VC has also suffered significantly. Fundraising went from $49B in 2021 to only $1B in 2023. So is it time to sell and get out of China?

Despite the many pessimistic views surrounding this giant country, Li Lu, a prominent investor known as the "Warren Buffett of China," argues in his book "Civilized, Modern, Value Investing and China" that China's long history and cultural emphasis on success make it unlikely for the country to fail in the long run.

Why China Will Likely Recover

China's Resilient People: Chinese culture is built on hard work and a strong sense of national pride. Having overcome challenges for millennia, the Chinese people are unlikely to accept long-term decline.

The Importance of Openness

Global Integration is Key: Li Lu believes that isolationism hurts a country's growth. China's continued participation in the global free market is crucial for its long-term success.

Due to China's participation in the free global market, the country's GDP has grown rapidly over the last 20 years. Although China's GDP growth has slowed down in recent years, the country is still growing at a good rate of 3.38%.

This is still significantly higher than the US GDP growth rate of 2%.

The Bottom Line: Invest for the Long Term

While nobody can predict exactly when China's market will recover, a long-term perspective is key. By focusing on value investing and maintaining a margin of safety, investors can potentially find opportunities in the current market downturn.

The same principle applies to the US stock market. Long-term investing has historically proven successful and can generate significant rewards.

When considering investments in countries like China and the US, staying up-to-date on their latest economic data is crucial. This knowledge helps investors understand the direction each country is headed.

Here's where Bay Area Times can be a valuable resource. They offer insights into various countries and tech giants, enabling investors to stay agile in the market.

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Chloe
Arigato Investor