Made in China

CHINA

Solid long-term fundamentals like population migration and high savings are underpinning Chinese prices says Tim Dickson, fund manager Asian Equities, Invesco Perpetual. But could high liquidity and limited domestic investment options be driving the market into bubble territory?

Chinese policymakers surprised financial markets at the end of October with their first interest rate hike since the global financial crisis ended. The timing of the move appeared to catch markets off guard, particularly as the governor of the People’s Bank of China (PBoC), Zhou Xiaochuan, had recently given a speech in Washington on controlling inflation through policy tools outside of interest rates. While the economic impact of the 25 basis point increase in the one-year deposit and lending rates is likely to be small, the move does highlight Beijing’s determination to set a sustainab...