Growth rates put China in position as dynamo of Asia Pacific region

Since March this year the Asia Pacific markets have rallied strongly, as investors anticipated that loose monetary policy and government stimulus packages would be enough to trigger a recovery.

The MSCI Asia Pacific ex Japan Index rose by 7.2% in sterling terms over the last 12 months to 31 July, outperforming the MSCI World Index which dropped by 6.3%. Of the major Asia Pacific markets, China and India performed strongly. China benefited from economic recovery driven by government-directed bank lending, while in India investors responded very positively to better than expected performance by the Congress Party in elections. The smaller markets of Indonesia and Thailand outperformed as they rallied strongly on the return of risk appetite in the second half of the period. S...