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The myopic Old Wall punditocracy would have you believe everything wrong with China’s economy starts and ends with the U.S. trade war.

As Hedgeye CEO Keith McCullough and Senior Macro analyst Darius Dale explain in the clip above, that’s an incredibly lazy way to look at what’s going on in China.

Instead, investors should first consider China’s growth “comparisons.” Let’s back up a bit and explain what we mean...

In 2016, the country experienced a massive stimulus-fueled ramp in GDP. When China was forced to “comp” those massive stimulus fueled levels of growth (otherwise known as “base effects”), these two-year base effects were so steep that the Chinese economy started to slow in January of 2018.

And while the most difficult conditions for China now appear to be in the past, it’s not exactly smooth sailing ahead, either.

“While the base effects are easing, they are not easy,” McCullough explains.

“This [current] level of comparisons which was systematically and politically created by Xi to become elected for life is much higher than even [in 2015] when the global economy was down on its knees, crying, begging and praying.

To blame it all on trade wars is not only politically convenient, it’s just stupid. There’s a lot to be concerned about, and obviously markets are too.”

Watch the full clip above for more.

China's Problems Go Way Beyond A 'Trade War' - the macro show