China is entering its fifth decade after the first reforms of the Deng Xiaoping era, and the conventional view among global investors, even emerging markets specialists, is that the economy is mature and growth avenues are mostly exhausted.
The argument is that “miraculous” growth (to borrow former US Treasury Secretary Lawrence Summers’ term), driven by a favorable demographic engine and creditfueled investment in housing and infrastructure construction, is unsustainable and even has to be “paid back” with depressed growth levels going forward.
While there are elements of truth to this perspective, it is too simplistic and can lead investors to miss important long-term opportunities. A holistic view shows that robust, higher-quality future growth may be achieved through a better balance between trade, domestic consumption, and investment.
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.
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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.
