Economic reform a top priority for China

As Asia’s fastest growing economy, China continues to outperform other emerging markets, expanding 11.9% in the last quarter from a year earlier. “Economic reform remains a top priority for the Chinese government, a trend we expect to continue”, comments Charlie Awdry, manager of the Gartmore China Opportunities Fund.

Since 2003 the Communist party in China has shown an ongoing commitment to economic reform. The latest development allows individual investors access to the Hong Kong stock market through broadening the Qualified Domestic Institutional Investor (QDII) scheme. Charlie highlights, “this is not only good news for the Hong Kong market but especially good news for the Hong Kong exchanges and clearing, both of which the China Opportunities Fund has significant exposure to”. In addition, this month the first Chinese fund manager will begin investing in 10 overseas equity markets, including India, Japan and Hong Kong and US. Both examples can be seen as attempts by the Chinese government to tackle the issue of high domestic liquidity, by encouraging greater outflows from the financial system through investment abroad. The move also highlights how strong economic growth in China is having a positive impact on Hong Kong, enabling it to flourish as China continues to rapidly expand. The majority of the Gartmore China Opportunities Fund’s exposure is via the Hong Kong stock market.

The Gartmore China Opportunities Fund has returned 45.9% year to date and is the top performing Fund in the Lipper IMA Asia Pacific ex Japan sector over six and twelve month timeframes.