Back to the Trump issue, and perhaps the most likely, and damaging, dangers to growth this year could be trade tariffs imposed by the US which may curtail Chinese exports.
However, Nicholas Yeo, manager of Aberdeen’s New Dawn and Asian Smaller Companies investment trusts, believes China has the resources and policy tools to guard against financial instability.
“To preserve growth, we can expect Beijing to step in and stimulate its economy, more likely through infrastructure spending than a return to property stimulus,” he says.
“It’s all part and parcel of China’s boom-bust transition from an insulated and impoverished nation of farmers to a liberalised and prosperous global powerhouse.”
The catch? Expect more stock market volatility.
