The reality behind the China headlines

Growth still strong and valuations attractive

clock
 Rob Brewis, fund manager at Aubrey Capital Management
Image:

Rob Brewis, fund manager at Aubrey Capital Management

A recent visit to Beijing proved to be an opportune moment to look at the reality of life in the world's second-largest economy, despite a background of doom-laden headlines about trade wars and economic slowdowns.

In reality, China is significantly less vulnerable to a US trade war than at any time in the past 20 years. Not only is it becoming a service-led economy, but the importance of the US as an end market for exports has shrunk considerably. In many respects, US President Donald Trump is a decade or so too late; while China's adjusted resource gap peaked at nearly 14% of GDP in 2007, today that has all but disappeared, reflecting a much more balanced economy. The second point is that income growth remains at a very healthy 8% to 9% with retail sales (ex-autos) running at around 10%. There...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Markets

Industry Voice: PIMCO Secular Outlook

Industry Voice: PIMCO Secular Outlook

Reaching for Resilience

PIMCO
clock 28 June 2022 • 2 min read
Market Movers Blog: S&P 500 slides into bear market

Market Movers Blog: SEC chair Gensler terms bitcoin a commodity

Latest news and analysis

Investment Week
clock 27 June 2022 • 1 min read
David Kimberley is an investment trusts writer at Kepler & Partners

Opportunity amid madness: Valuations more attractive in wake of panic-driven price drops

Buy opportunities have arisen

David Kimberley
clock 21 June 2022 • 4 min read
Trustpilot