Edward Smith, Rathbones' asset allocation strategist, takes a closer look behind China's headline growth figures and explains why its future lies in the development of more 'dynamic' industries.
During the recent Fifth Plenum, the Chinese government reaffirmed its commitment to doubling the size of its economy by 2020. On the face of it, that suggests an annual growth rate of 6.5% for the next five years if the nation is to hit its target. We think that level of growth could mean more of the same from the Eastern giant: overinvestment that would exacerbate both its debt bubble and its overcapacity. However, there may be a way for China to hit its targets without pushing through damaging and unsustainable growth. It could also improve the quality of the nation's economic da...
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