A Goldman Sachs report discusses its meetings with onshore and offshore fund managers at asset-management firms and insurance companies on China's prospects ahead.
- These investors expressed concerns surrounding the timing & magnitude of the recovery
- its feared that the weakening home market and fallout from three years of pandemic curbs will mean a slow recovery for domestic demand/household consumption
- measures to address the weakness of the property sector have so far failed to spur industry recovery
- “China’s own experiences suggest property down cycles have always been associated with weak household consumption”
- “Local investors therefore question, without the stabilisation or rebound of the property sector, whether relaxation of Covid controls alone could generate high single-digit year-over-year growth in household consumption.”
Non-local investors are a touch less downbeat.
----
China equity strategists at GS are in contrast, having upgraded their targets for China stocks twice in January alone.
Let's see if the balloon business cause a rethink on this.
