China's Slowing Growth is Good for Investors

Sustainable, market-driven growth will contain a larger consumer and a smaller state-owned enterprise component than currently present and a stronger social safety net

Hermes 16 October, 2014 | 2:37PM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Gary Greenberg, Head of Hermes Emerging Markets, explains why concerns about slowing Chinese growth are unfounded. 

Since the global financial crisis of 2008, the future of emerging market growth has been in doubt. The crisis reset Western growth prospects for good and emerging market policymakers have been looking for a new direction. But which direction, and how?

We’re seeing a wide range of levers being pulled in emerging markets, from profound supply side reforms to deeper political shifts.  China is imposing financial discipline on local governments to keep debt levels in check, while in Russia we are seeing intimations of a return to Soviet-era autarky. For us, what is of interest is the changing nature of growth dynamics and how emerging market policy-makers are reacting to a rapidly changing landscape.

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About Author

Hermes  Hermes is a multi-asset fund manager offering global institutional and pension fund clients access to a broad range of specialist, high conviction investment teams.

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