Classiarius Viewpoints – we have said all along and this is not news at all. As economies move from their early stages of high growth in the 8% to 12% range, they naturally mature and glow more slowly. China is now fading to 6% or less, but according to reports, no need to worry.
Mr Alexander Treves of JP Morgan Asset Management (CNBC sourced, 4 March 2019) said that his firm was so excited about the opening of China`s financial markets. Now there have been many who are worried about China growth, but Mr Treves, says that they bright spot is the ability to invest in Chinese companies. This is surely true but the concern that many have, and we share here at Classiarius is the slowing economy, heavy debt burden and the strong-arm tactics and game theory slight-of-hand by Donald Trump.
China announced at its closely watched annual meeting of its parliament that the country will see economic expansion of 6.0 to 6.5% in 2019, which is somewhat lower than the 6.6% growth of 2018. Note that this 6.6% expansion was the slowest since 1990. China is now opening its markets to foreign investors, which has many investors excited. They are looking at growth of individual companies not the overall GDP. This does make sense for stock investors, many who are taking more interest in the Middle Kingdom.
Beijing is now taking a more positive view of overseas investors as the global index provider MSCI announced it will substantially increase the weighting of mainland China shares in its benchmarks. More on this topic in the coming weeks and months.