Guide to China 4Q 2023
Can China turn around its economy?
One of this year’s main surprises has been the disappointment with China’s economic recovery and market performance. In January, consensus estimates pointed to 6% GDP growth this year, while today estimates stand at 5% as China’s recovery lost significant speed in 2Q. In the interim, Chinese equities have corrected 23% and the Yuan has weakened 7%. Can China turn around its economy or are the headwinds too large? Key issues for investors to consider include:
- Tracking the continuation of recent improvement in economic momentum
- Monitoring the confidence of Chinese households, businesses and local and foreign investors
- Calibrating the extent of stabilization in the housing market
- Gauging the cumulative impact of this year’s many pro-growth stimulus measures
- Balancing long-term headwinds vs. depressed valuations and pockets of opportunity