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Yes, China's slowing but don't write it off too quickly
Debates over the pace of China’s economic slowdown have broken amongst analysts with many predicting a steep decline for the world’s fastest growing economy. Economic expansion in China is expected to come in below the country’s previously stated 7.5 percent projection. Yannick Naud, Portfolio Manager at Sturgeon Capital, believes that many intuitions are underestimating the growth potential of the country. The latest remarks from the International Monetary Fund on China are congruent with this more optimistic outlook.
Changyong Rhee, Director of the Asia and Pacific department at the IMF, believes that growth will be “well above” 7 percent next year. Early estimates for future growth stand around 7.1 percent, but comments from individuals like Rhee suggest that growth could surpass expectations. This is positive outlook contradicts many of the major US lenders perspective on China’s current state.
Earlier this week both Goldman Sachs and Merrill Lynch reduced their projections for future growth in China. Goldman Sachs forecasted third and fourth quarter growth around 7.1 percent, from 7.4 percent. Annual growth is estimated at 7.3 percent, below the Chinese government’s target of 7.5 percent. Merrill Lynch and RBS echoed similar viewpoints, with Merrill Lynch reducing its 2014 growth forecast to 7.3 percent and RBS dropping its estimate to 7.2 percent. Naud remains positive on growth in China stating that the country should outperform other emerging markets, although growth might not resemble previous year’s development.
01:34 minutes
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