Fund managers bearish about prospects for Chinese economy

FUND managers are unconvinced about the potential for the Chinese economy this year, and a sizeable majority expect the country’s imports and exports to get worse as the summer gets underway.

In a survey conducted by Capital Spreads and seen exclusively by City A.M, twothirds of the hundreds of fund managers surveyed expect that both imports to and exports from China will slip to a lower level in the next quarter.

Another 58 per cent are also bearish about the possibility that the Chinese economy will overtake the US in size this year, with 57.2 per cent suggesting it was neither fairly nor very likely.

Earlier this year, the International Comparison Programme at the World Bank suggested that the massive emerging economy would become the world’s biggest this year, surpassing the US which has been the leader for nearly a century and a half.

“As the biggest trading nation, when China sneezes, the rest of the world may well catch a cold. A slowdown in its import and export market sounds a warning note on its own economic health,” said Capital Spreads’ head of trading and market risk, Nick Lewis.

The Chinese economy has grown more slowly in the years since the financial crisis, before which it regularly saw doubledigit rates of expansion.

The government is now targeting growth of 7.5 per cent, though some analysts suspect even that will be difficult to achieve in the medium term.

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