China is the world’s second largest economy, just behind the US economy in nominal US dollar terms. The rapid economic reform and progression of the last few decades has seen China leap ahead in terms of manufacturing, exporting and importing of goods, to become the fastest growing consumer market.
Even as an emerging market, China is one of the most influential contributors to the global economy. This integration and trade with the rest of the world is a relatively new development, and one which is largely responsible for the jump in economic growth. However, this development did not come without challenges; China is experiencing extreme economic inequality and has not kept up its growth momentum.
In order to maintain their impressive pace, Chinese leaders must encourage domestic demand on its home soil. This will shift the focus away from debt and exports, to selling stocks to prompt growth.
As one of the UK’s leading investment managers, LGIM offers knowledge and experience that can bring real benefit to investors looking to understand economics, policy and politics in China.
Find the updates on the impact of Chinese investment in Africa and the UK, Chinese inflation and important updates on the Chinese stock market. MacroMatters also provide specialist insights and news on the Chinese renminbi.
Our Asset Allocation team includes dedicated and accomplished emerging market economists and strategists whose clear focus is to assess the macroeconomic environment across the China and the emerging world. Our economists then work with our team of strategists and portfolio managers to translate their views into what this means at a portfolio level.
Investors are accustomed to assessing risk, estimating the likelihood of potential outcomes and their impacts. But the coronavirus is a black swan, unpredictable and with an eventual outcome shrouded in uncertainty. I discussed this uncertainty during my recent Bloomberg appearance.
High-frequency economic indicators suggest the Chinese economy has yet to recover from the coronavirus, supporting anecdotal evidence of extended factory closures. Depending on how quickly activity returns to normal, the Chinese economy could contract at a double-digit pace in the first quarter, pushing annual growth down to just 3%.