Skip to main content


Audience for the document: Share Class: Language of the document:


Share Class: Language of the document:

Change Details

If you need to change your email address please contact us.
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest


Three Contrarian Investing Views on China, Stagflation, Supply Chains

Key Insights

  • We have identified three contrarian investing ideas.
  • We think the market’s current consensus of a stagflationary environment, in which growth is stagnant but inflation is high, is likely to prove incorrect.
  • We also think product shortages and supply chain bottlenecks are likely peaking and that it’s time to get constructive on China. 


When my team and I met recently, as is often the case, we started with a discussion of what we think is the consensus in the market right now, and where we think that consensus could prove to be wrong as we look toward the new year.

We came away with three main ideas that we think are contrarian themes that go against the market consensus.

1. Stagflation Is Highly Unlikely

First, we think the market’s current consensus of a stagflationary environment, in which growth is stagnant but inflation is high, is likely to prove incorrect.

The stagflationist view is that rampant inflation will depress demand, leading to low growth and high inflation like what was seen in the 1970s, which was a terrible time to be invested in stocks. We think that’s highly unlikely. We think that most of the inflation that we’re currently experiencing in the U.S. is a function of temporary supply tightness and logistical issues, which in turn are a function of labor shortages related to COVID-19 and the impact of associated fiscal policies used to combat the pandemic, such as the CARES Act or the Paycheck Protection Program. We believe that as the virus recedes and direct government payments to individuals cease, workers will return to their posts, and much of the inflationary pressure that we have experienced this year will abate.

In fact, while nothing is impossible, we would say that it is mathematically implausible that inflation can continue at 2021’s pace. Inflation has been driven by too many one-offs that are simply unlikely to repeat in 2022. Used car prices, for instance, are up 21% this year. Does anyone really think they’ll be up another 21% next year? That sounds like a stretch to us.

Source: Edmunds, as of July 1, 2021.

2. Time to Short the Shortages

That gets us to our second non-consensus view, which is that it’s time to “short the shortages.” The mainstream news media is filled with stories about product shortages and supply chain bottlenecks. Telling you that Christmas is canceled this year is a great way for them to keep your eyes glued to the TV screen, but don’t buy it. Prices and backlogs for everything from soybeans to steel to shipping containers and semiconductors rose to unsustainable levels this year, but many are already showing signs of having peaked. Many commodity prices such as iron ore are past their peak, port congestion is showing signs of easing, and semiconductor inventories are actually rising. We think there may be an opportunity to try to take some profits in these areas of the market.

3.     Getting More Constructive on China

Our final non-consensus view is that it’s time to get more constructive on China into 2022. We think a way to make money trading the Chinese market is just to listen to what the government tells you. In late 2020, the Chinese government made clear its intentions to decrease stimulus in 2021. That meant that money supply growth would decline and total social financing would decrease, leading to a downcycle in credit. And that’s exactly what happened. In 2021, Chinese bond yields rose, equities declined, and the credit market is now plagued by distress surrounding the defaults of property companies.

Now, however, the tone from the government is starting to change. With the property market accounting for a quarter of the country’s GDP by some estimates, they can’t simply allow a massive sector-wide default. We think that the well-publicized default of a few of the weaker players will be contained and may in retrospect represent the bottoming of the Chinese credit cycle. The central bank already cut interest rates, and now the government is telling the banks to continue to extend credit to property developers for existing projects. Signals like that are usually a good indicator that it’s time to start getting more constructive on Chinese assets as we head to 2022.


This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, and prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request.  

It is not intended for distribution to retail investors in any jurisdiction.

USA—Issued in the USA by T. Rowe Price Associates, Inc., 100 East Pratt Street, Baltimore, MD, 21202, which is regulated by the U.S. Securities and Exchange Commission. For Institutional Investors only.

© 2023 T. Rowe Price. All rights reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the bighorn sheep design are, collectively and/or apart, trademarks or registered trademarks of T. Rowe Price Group, Inc.

Previous Article


Why Impact Investing Needs Public Debt Markets
Next Article


Playbook for a Shifting Economic Landscape

You are now leaving the T. Rowe Price website

T. Rowe Price is not responsible for the content of third party websites, including any performance data contained within them. Past performance is not a reliable indicator of future performance.