M&G: Big Chinese Brands Offer Investors Value

China faces big issues with the shadow banking system and the level of non-performing loans. However, the government is looking to get to grips with the risk of bad debts

M&G Investments 2 February, 2015 | 4:07PM

Morningstar's "Perspectives" series features investment insights from selected third-party contributors. Here, Matthew Vaight, emerging markets fund manager at M&G Investments, comments on the outlook for China.

The macroeconomic situation in China continues to dominate headlines. Investors are preoccupied with the country’s growth rate, which slowed to its slowest pace in two decades in 2014, despite the Chinese government’s promotion of lower growth as the ‘new normal’. The tolerance of slower growth reflects the adjustment that is taking place as the government shifts from an economic model based on investment and exports to one based on consumption.

However, policymakers are trying to tread a careful path that involves providing modest stimulus measures aimed at entrepreneurs and infrastructure projects and ensuring the faltering property market and large debts do not overwhelm the economy.

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M&G Investments  is a leading retail and institutional fund manager.

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