PA ANALYSIS: China must deliver on ‘global powerhouse’ status

With reports of China flexing its ballistic missile might in response to Trump’s “provocative remarks”, let’s hope Chinese New Year is celebrated with the right kind of fireworks.

PA ANALYSIS: China must deliver on ‘global powerhouse’ status


January is always a busy time for fund group’s marketing teams as they equate the year’s animal to their latest bullish views. Beginning on Saturday, I’m sure the Year of the Rooster will deliver its fair share of nuggets.  

UK investors, distracted by Brexit, can be forgiven for having somewhat lost track of the fortunes of the world’s second-largest economy over the past 12 months; perhaps the prime time for investing there.

Having lost considerable ground in the second half of 2015, Chinese equities rallied strongly in 2016 – MSCI China delivered over 20% during the calendar year, with a similar aggregate return from China equity funds.

Matthew Vaight, manager of the M&G Global Emerging Markets Fund, suggests investors in Chinese equities are faced with a quandary in that it remains a “true stockpickers market” despite being a “challenging market” to fund good investment ideas at present.

The Chinese economy is widely considered to be divided into two sectors – the ‘old’ economy based primarily on low-cost manufacturing and infrastructure capex and the ‘new’ economy focusing on tertiary industries, consumption, and the internet.


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