SaxoTV

Loong: Markets need to accept low growth as 'new normal' in China

375 views
October 21, 2014 asia, asia growth, asian, asian markets, asset purchases, assets, astrazeneca, chicago wheat, chief, chief economist, chief executive officer, china, china 2014, china banks, china consumer spending, china credit bubble, china data, china deflation, china economy, china economy growth, china economyhci, china equity market, china exports, china gdp, china gold, china growth, china in 2014, china manufacturing, china mobile, china outlook, china pmi, china policy, china politics, china rates, china slowdown, china stimulus, china stock market, china trade data, china-us dialogue, chinacurrency, chinaeconomy, chinarai, chinese, chinese banking sector, chinese banks, chinese company, chinese consumption, chinese economy, chinese economy outlook, chinese equities, chinese foreign reserves, chinese gdp, chinese government, chinese growth, chinese interest rates, chinese investment, chinese premier li kequiang, chinese rates, chinese retail, chinese stock market, chinese stocks, chinese tech firm, chinese yuan, chip maker, equities, equity, equity market, equity strategy, equity trading, gdbusd, gdp, gdp data, gdp estimate, gdp estimates, gdp forecasts, gdp growth, gdp growth europe, gdp upgrade, gdpeur, gdpusd, investing, investing 2014, investment, investment opportunities, investment strategy, investments, investor, investors, saxo tv, slow growth usd, slowdown, slowed job growth, slowing global growth, tradingfloor.com, yuan
Pauline Loong, Managing Director of Asia-analytica, gives us her assessment of the latest Chinese GDP figures: "The worst quarterly GDP performance in almost six years has raised hopes of a bolder policy response from Beijing. But more aggressive measures in the coming months might still not provide the hoped-for catalyst on stock prices or deliver the boost needed for a return to market-moving growth rates."
Pauline says we need to "be realistic" about China's GDP and get used to lower numbers. For example 6.9% could be the "new normal" next year. China's official GDP target for 2014 remains 7.5%, a number which looks increasingly out of reach. In response, Beijing has been "micro managing" stimulus, in Pauline's view, going from sector to sector and even telling banks what size of business to lend to.
Pauline Loong warns that China's gear change from export driven economy to consumer driven market will take longer than most may imagine, it's worth bearing in mind that Chinese GDP per capita is only just above Iraq in global rankings.