Above 6.5 percent
GDP growth rate that economists believe China can achieve in 2017
Asian asset prices.
Despite the uncertainties, some fund managers said they will continue to bet on the opportunities in the structural shifts of the Chinese economy as well as on beneficiaries of the reforms.
“In 2017, Chinese policymakers are likely to maintain a pro-growth stance. Monetary policy will shift back to a more neutral stance with inflation returning. Fiscal policy will remain very accommodative,” said Ning Jing, a portfolio manager at Fidelity International.
“Investors should also not overlook opportunities in traditional sectors that still continue to be the backbone of the economy,” Ning said.
She noted that supply-side restructuring in steel and coal will weed out the inefficient players. So, companies with healthy cash flows, strong management teams, and attractive dividend yields will continue to deliver returns.
Qin, at CITIC Securities, suggested that investors take a conservative approach to trading stocks and keep an eye on marginal changes in the business climate.
He warned that a potential risk could be that China’s monetary policies tighten in a way that beats market expectations or, in the opposite direction, faster renminbi depreciation could cause capital outflows to accelerate.
Two anxious investors check stock quotes at a brokerage in Fuyang, Anhui province, on Dec 5.