Concerns that China will create problems for the global economy have become chronic in the past decade or so. The recent moderation in Chinese economic growth, after a relatively more muted pandemic slump/recovery, is starting to generate some angst. Moreover, the ongoing regulatory attack on select high-flying mega-cap tech shares in China is adding to concerns.
A just-published report examined the outlook for the Chinese economy, policy and asset markets, and concluded:
The economic emergency is over, and economic policies are returning to normal.
China’s domestic demand will continue to provide solid support for the global economic expansion, driven primarily by consumption.
Renewed worries over antitrust measures aimed at internet stocks are temporary in nature, and do not threaten the cyclical advance of either stock prices or domestic demand.
Stay overweight China within an EM equity portfolio. Stay neutral on the currency and yuan-bonds within their respective EM portfolios.
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