Prospects for China in the Year of the Rat

Estrella Llorente, Senior Portfolio Manager at Santander Asset Management UK on the outlook for Chinese markets.

Says Llorente, “Despite the volatility in global markets and high valuations, we are optimistic about the economic growth outlook for China. We will likely see a slower but more balanced and healthy growth over the next few years to include development of rural areas and the Western region. Higher inflation and a slowing US economy could impact the market, however China and most of the Asia-Pacific countries have increasingly diversified their trading partners and depend less on the US, so they should be less affected by a weaker global economy.

“Key drivers of the Chinese market will be domestic investment, consumption, infrastructure, monetary and fiscal policy and international flows. The Santander Global Emerging Markets Fund invests in all the Chinese markets through very specialist and experienced fund managers. We can also have bets with other financial instruments in the Chinese markets or Chinese companies listed in other countries.”