Fast reading
- Concerns around China’s handing of the Covid pandemic and volatility in the country’s property market has weighed on the valuation of Chinese equities, which are trading at discounts not seen for more than two decades.
- The government’s abandonment of its strict zero-Covid policy at the turn of the year should provide a boost as business activity picks up and consumers get out and spend. The country’s gross domestic product is forecast to expand by more than 5% in 2023.
- Over the longer-term the Chinese economy is in the midst of a transformation, from an investment-led to a consumption-led model, creating a wealth of unique and compelling investment opportunities that may suit a standalone allocation to the asset class.
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