China – economy’s evolution creates new opportunities for investors
Investors have recently questioned whether China’s rapid economic progress of the past two decades can continue.30.07.2012 | 16:33 Uhr
Key points
- China’s economic slowdown is simply a move to a more sustainable level and we don’t expect a hard landing
- Domestic demand is increasing, fuelled by wage hikes, urbanisation and a widening of retail networks
- The shift from an export-led to a domestic demand-led economy is a more balanced model
- Property price rises are not a cause for concern as household debt remains low, employment rates high and demand outstrips supply
- We are optimistic about China’s long term economic outlook given looser monetary policy, financial sector reforms and compelling equity valuations
- Stock picking will be essential to maximise returns; we favour companies which have proprietary technology, are exposed to domestic consumption, have strong franchises or generate strong cash flows.