Aberdeen's Young: China is showing signs of desperation

ON ASIA PACIFIC EX JAPAN

Recent Chinese policy action has improved sentiment but may also be a sign of desperation, according to Aberdeen Asset Management Asia managing director Hugh Young.

Asian stock markets have made progress in recent months, lifted by major central banks’ attempts to reflate the global economy. These included the ECB’s bond-buying plan and the long-awaited third round of quantitative easing from the US. Also boosting sentiment has been China’s massive cash infusion to boost liquidity in its banking system, as well as interest rate cuts in Europe and China. However, the gains have been capped by lacklustre economic data that stoked global growth fears and worries that political discord in Europe will hamper efforts to resolve the debt crisis. Regiona...