Phone +61 8 9244 4394
info@blueedge.net.au

Why growth in China is unlikely to slow too far and why it needs to save less and spend more

Shane Oliver, Head of Investment Strategy and Chief Economist.

 

The attached note looks at the outlook for China. The key points are as follows:

  • China's economy is slowing but not collapsing as the services sector holds up. A further slowing is likely in the short term, but policy stimulus is likely to see growth improve in the second half, giving 2019 growth of 6.2%.
  • Concerns about China's rapid debt growth are overstated given it reflects high (not low) savings.
  • Chinese shares are cheap and attractive on a 12 month view, but expect short term volatility.
  • Reasonable Chinese growth is a positive for the Australian economy. The housing downturn will dominate though, pushing the RBA to cut rates and this will see the $A fall further into the $US0.60s.
 

 

 

 




Go Back

FREE Consultation

Book Your Complimentary One Hour Consultation Now

Captcha Image