EFG's Afzal and Gerlach: A letter from Hong Kong

Notes from recent investment trip

On a recent visit to Hong Kong and Singapore we took the opportunity to meet with market strategists as well as private and public sector economists to better understand the economic problems China is facing given economic sentiment is in the doldrums.

The abrupt Covid policy U-turn and the reopening of the economy in late 2022 led only to a brief pickup in economic activity. Stock prices fell sharply in 2023 and difficulties in the property market have reverberated through the economy. abrdn China enters voluntary wind-up after shareholders approve Fidelity merger In the past, extensive infrastructure spending boosted the property market and allowed local governments to sell land at high prices. In response, the private sector took on too much leverage. That cycle has now ended but lingering problems persist relating to prior...