We remain optimistic on China, with an above-consensus GDP forecast. This is based on global economics and China’s ability to harvest demand. Domestically, China is unbalanced but on a global basis it is diversified (its New Silk Road strategy is on mark). Moreover, in 2018, trade matters more than local consumption. On one hand, strong growth will help support weaker property prices that peaked in 2016, but should trigger action by policy makers to accelerate deleveraging and lower fiscal spending. Lower capital outflows and renewed positive investor confidence has lowered CNY deprecation risks..
By Peter Rosenstreich