Policy shift breathes fire into China’s economyOver much of the last decade China has been seen as the factory to the world. Some market commentators had, however, feared the mighty Chinese dragon had been slayed following five straight quarters of year-on-year economic growth below 8%. Encouragingly, data released in recent weeks suggests the world’s second-largest economy is showing signs of a recovery stimulated by a policy shift since July. Janus Henderson Investors | 05.09.2013 13:25 Uhr
Supportive data released in recent weeks indicate China is set to meet the government’s 7.5% growth target for 2013. The official August purchasing managers’ index (PMI) survey for the manufacturing sector rose to a 16-month high of 51.0. PMI readings above 50 reflect expansion. Meanwhile, the services sector PMI continued to expand (53.9) albeit slightly down from July’s reading (54.1). Profits from China's industrial firms rose 11.6% year-on-year in July and foreign direct investor inflows rose by 24.1% in July from a year ago to $9.4bn. Retail sales and exports were also up on last year. In our view, China offers the most attractive combination of value and yield at current levels across the Asia Pacific region, particularly with its improving economic environment. As a result, we have been increasing exposure through companies such as Hong Kong-listed Skyworth Digital, which is one of the largest TV manufacturers in China. The company has the potential to benefit over the long term from rising incomes and higher rates of urbanisation.
Mike Kerley, manager of the Henderson Asian Dividend Income Unit Trust and the Henderson Horizon Asian Dividend Income Fund.
These are fund manager views at the time of writing and may differ from those of other Henderson fund managers. The information should not be construed as investment advice. Before entering into an investment agreement please consult a professional investment adviser.