Multi Asset 2022 long-term capital market assumption
The 2022 Capital Markets Assumptions show the global economy outlook is shaping up to be a lot brighter. However, risks remain as pre-pandemic challenges begin to resurface.
Emerging markets equity
China is embarking on a new stage of growth
February 9, 2021
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 credit-fueled 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.
In this article, we discuss:
- China’s growth in the short, medium, and long term
- Infrastructure development and the increasing productivity from robotics, automation, education, and training
- Middle-class consumption and attracting foreign multinational corporations
- Financial reform and innovation
Read more about the next leg of China’s journey.
