Tuesday, May 14, 2013
What’s happening with Chinese stocks?
In this investment perspective, Martha Wang, the Portfolio Manager of the Fidelity China Fund, gives her views on China’s economy and highlights where she finds risk and opportunity.
May 2013
What your macro-economic outlook for China?
China’s economic growth for 2013 is likely to reach the high single digits and mildly increase from 2012 when the economy expanded about 8%. The current economic recovery is supported by an improvement in the export sector and the investment cycle, while the liquidity environment is largely accommodative. Over the medium term, with export growth likely to decline, China’s economy is expected to slow to high-single-digit from recent double-digit growth. Although this is a decline from the growth rates of the past decade, it is still a healthy and enviable growth rate compared with major developed economies. However, I believe that the government will be willing to accept a lower GDP growth rate as it will focus on the quality rather than quantity of GDP growth. Government efforts will be more focused on rebalancing the economy towards consumption and away from investment and improving efficiency. We could see more reforms in areas such as the financial sector, state-owned enterprises and the rural economy.
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China Financials ETF [CHIX] is attuned to the Solactive China Financials Index and delivers as per the performance of the 36 top Chinese bank securities that the benchmark comprises of. Fund issuers charge annual fees of 0.65% on transactions.More than half of the assets for CHIX ETF are bank stocks and the rest is spread out through the real estate, insurance and financial services equity from China.
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