Why a Chinese growth surprise will trigger a mining rally

Miners are set to rally ‘strongly' in the second half of 2012, according to Barings' Clive Burstow, as Chinese growth will surprise and beat its annual growth target, boosting investor confidence.

The manager of the recently-launched Global Mining fund said a positive surprise in Chinese growth will be the catalyst for a rise in mining shares, which fell 27.8% last year. "China reduced its growth target to 7.5% but in the past ten years, when we have seen two big recessions, GDP growth has managed to beat these targets. It is not a hard and fast number, and even if we do see 7.5% growth, it will be exponentially more positive for commodities. "Central bankers have their fingers on the triggers for QE and have a real desire for growth, even if it is sub-trend growth. China will ...