China

ON ASIA

ON BONDS

China has eclipsed Japan as the world's second largest economy after posting GDP figures of $5.8trn for 2010, beating Japan's $5.474trn.

Ignis' Diamond Lee believes Asia will have a major inflation problem in the second half of the year, causing markets to become more risk averse.

Schroders' Matthew Dobbs is 6% underweight in financials in the group's £84m Asian Alpha Plus fund as the manager attempts to safeguard against rising interest rates in China.

The Fidelity China Special Situations fund is set to issue further C-Shares worth up to £162m following an overwhelming vote by shareholders in favour of the move.

CHINA CLIMBS THE WALL OF WORRY

Swiss & Global has launched a fund investing in the emerging economies of China, India and Indonesia.

Emerging markets do not face a bubble in the short term as the region shows robust economic fundamentals with little leverage and strong growth, says Michael Hasenstab at Franklin Templeton.

China has raised interest rates for the third time in four months in an attempt to cool inflation.