Will China Suffer a Hard Landing?

China’s transition from manufacturing to a more consumption and innovation-driven economy was always likely to be bumpy, and investors are seeing signs of that now

Martin Currie 23 November, 2015 | 9:00AM

Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Andrew Graham, Portfolio Manager of the Martin Currie Asia Unconstrained Trust, gives his views on China.

According to the doomsayers, China’s economy is about to come crashing down to earth in a ‘hard landing’ – a severe slowdown, by any other name. But before we embrace these harbingers of gloom, it’s worth considering a few facts about the Chinese economy.

Firstly, it has been adjusting to a period of slower growth for some time – a process we have been monitoring closely for four or five years. China’s transition from manufacturing to a more consumption and innovation-driven economy was always likely to be bumpy, and we’re seeing signs of that now.  While we don’t want to play down the risks that exist in China for investors in Asia, such as the property markets, and some bad loans on the balance sheets of banks, we don’t think a hard landing is on the cards.

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About Author

Martin Currie  is an Edinburgh-based international equity specialist asset manager

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