"Getting ahead of the growth opportunity". With such words, many an asset manager attempts to convince an investor to move their money into Chinese equities.
For anyone considering this, my warning is that returns will be lower and volatility higher than many an investment bank circular would suggest. When much of the Western world is mired in recession or slow growth, it is easy to quote big bold numbers to support China's investment case. Its share of global GDP reached 16% in 2020, so it dominates demand in such areas as commodities or luxury goods. The stockmarket is not the economy: Exploring the disconnect between GDP growth and Asian equities President Xi Jinping has set a goal of doubling GDP by 2035, which translates to just...
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