What Next for China?

China, the dominant country in Emerging Asia, is trying to keep its domestic economy motoring along and bring the technology sector into line

James Gard 26 July, 2021 | 11:02AM
Facebook Twitter LinkedIn

Shanghai skyline

China was the best performing equity market in the world in 2020 but has struggled to match that growth in 2021 so far. The rapid post-Covid 19 economic recovery appears to have run out of steam, while government intervention in the tech sector has unnerved global investors. China’s high-growth tech stocks like Tencent (00700) and Alibaba (BABA), have also fallen out of favour as value companies have staged a dramatic comeback. We look at the outlook for China this year and beyond and the key themes for investors.

The Trade War Isn’t Over

Tension between the US and China ramped up during the Trump era so there were high expectations for a reset in relations during the new Biden presidency. But in many ways the trade war lives on and continues to have an impact on economic policies. China’s self-reliance and drive to strengthen regional ties remain key themes too. The Regional Comprehensive Economic Partnership (RCEP), a trade agreement signed late last year including China and Japan, will create the world’s largest trading bloc. Kiran Nandra, an emerging market specialist at Pictet, says this is a huge boost for the region, creating a powerful geopolitical bloc to take on the US.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

James Gard  is content editor for Morningstar.co.uk

 

© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement