The reality behind the China headlines

Growth still strong and valuations attractive

clock • 4 min read

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 for free

  • 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

How big an impact could global elections have on portfolio allocation in 2024?

How big an impact could global elections have on portfolio allocation in 2024?

US, UK and India main focuses

Investment Week
clock 19 February 2024 • 8 min read
Hotter than expected US inflation tempers Fed rate cut expectations

Hotter than expected US inflation tempers Fed rate cut expectations

Annual price growth falls to 3.1%

clock 13 February 2024 • 1 min read
Investors turn defensive in January as rate cut expectations change

Investors turn defensive in January as rate cut expectations change

State Street Risk Appetite index

clock 08 February 2024 • 1 min read
Trustpilot