What Does the Trouble in China Mean for European Equities?

While it is true China is growing at a slower rate than before, its evolution from an infrastructure-led to a domestic demand-led economy has, so far, been successful

Fidelity International 26 January, 2016 | 8:20AM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Sam Morse, manager of Fidelity European Values reflects on investing in Europe over the past five years and how the Chinese economic slowdown is affecting the region.

Global markets have had a volatile start to the year, thanks in large part to China. Following August’s market rout, a second wave of heavy selling in the first week of 2016 sent equity markets worldwide into a tailspin. China’s economic slowdown has been the topic worrying investors most in recent months, but what does it actually mean for investors in European stock markets?

While it is true China is growing at a slower rate than before, its evolution from an infrastructure-led to a domestic demand-led economy has, so far, been successful. On a recent visit to the country, I discovered that a number of European companies operating in China’s industrial area are indeed finding life more difficult, and tougher competition from local businesses is starting to have an impact.

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Fidelity International

Fidelity International  

is a global leader in asset management, providing investment products and services to individuals and institutions in the UK, continental Europe, the Middle East and Asia Pacific.