Chinese Economy to Slow in 2014

The Eastern super power will see its economic growth slow this year thanks to structural reforms - but it will still outpace Western economies

Coutts 6 January, 2014 | 2:09PM
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This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, Gary Dugan, Chief Investment Officer Asia and Middle East at Coutts predicts what the next 12 months have in store for China.

This year’s first gauges of China’s economic strength have been a bit disappointing, but we don’t think this is a harbinger of weakness in the economy or stock market in 2014. There’s a good long-term story for China, based on better-quality economic growth, although the pains of the reform programme may hold the markets back for the moment. We think investors in general will continue to look for buying opportunities in Chinese equities, as are we.

The government’s official purchasing managers’ index, released last Wednesday, came in at 51 for December. This was below the consensus estimate of 51.2 in a Bloomberg survey and down from November’s 51.4 reading. The separate HSBC/Markit gauge fell to 50.5 from 50.8 a month earlier, but was in line with analysts’ estimates.

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