Is China over-investing?

Is China over-investing?

While China's average capital productivity has fallen and is now less than in other major economies, measures of the marginal efficiency of capital suggest China's investment is still adding value.

From a stock market perspective, China's return on equity is in the middle of the range of our comparator countries. We believe this implies China's price/earnings ratio should be below that of the US but above those of the EU and Japan (for any given price/book value ratio).

For our more in-depth assessment click here.

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

  • Data as at 28.08.2020, unless otherwise stated. This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.

    Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.