Chris Justham – Relationship manager for Seven Investment Management – joined Zak Mir and Mike Ingram in the Tip TV studio to discuss China’s recent market woes, and why sentiment may be misplaced.
Liars or scapegoats?
There are very few market participants who aren’t suspicious of China’s reported 7% growth, with many believing the estimate to be closer to 4%. The biggest indicator that this may be the case is the negative growth in manufacturing, as well as the currency devaluations over the summer. Despite this, Justham believes it may not be a case of China lying for appearances sake, and could be partly due to difficulties with generating the figures.
Re-evaluating China.
The country is split in that it is still an emerging market, but is trying to follow suit with the rest of the world. As a result, we’ve witnessed a shift in focus from manufacturing towards services in the Chinese economy. Despite negative PMI figures, Justham believes it’s important to consider the bigger picture of changes in consumer attitude occurring in the country.
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