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Is China headed for civil war? How wealth redistribution will reshape markets - Chen Lin

Kitco News

China is currently making reforms to redistribute wealth. This will have an adverse effect on the economy as investors move capital and business away from the country, and worse, cause an outright civil war, said Chen Lin, president of Lin Asset Management.

"There is a historical precedent. I'm not saying that what happened 2,000 years ago in the Han Dynasty will happen today, but there is a decent chance that China can slowdown," Lin told David Lin, anchor for Kitco News.

A slowdown of the Chinese economy would have an immediate impact on commodities.

“I think I would be concerned with base metals. China has 50% of worldwide copper consumption so if there’s a significant slowdown in China, copper will be hit hard, and a lot of commodities will be hit hard,” he said.

On gold, while a possible drawdown of Chinese demand of commodities could adversely affect precious metals, Lin said that gold is currently searching for a bottom.

Lin drew parallels to 2013, noting that when the Federal Reserve announced tapering then, gold found a bottom shortly after.

For more information on monetary policy, watch the video above. Follow David Lin on Twitter: @davidlin_TV.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.