Schroders’ Maisonneuve still betting on ‘soft landing’
Global manager says China’s growth won’t fall dramatically until 2017-2020.
Schroders’ global equity fund manager Virginie Maisonneuve is still banking on a ‘soft landing’ for the Chinese economy, even though hopes of a major stimulus package have been dashed.
Ms Maisonneuve, who runs Schroders’ £44m Global Alpha Plus and $724m (£470.3m) ISF Global Equity Alpha funds, forecast Chinese economic growth of 5-6 per cent a year by 2017-2020.
“The population is peaking now and the impact of that and the peaking of the working population will be noticeable in terms of economic activity by then,” she said. “But I can’t see a 5 per cent month this year - I might be wrong but I really can’t see it. The leaders are targeting stability.”
However, she said a large stimulus package from the Chinese government was “not realistic” and “the market got ahead of itself” expecting one.
The Chinese government released a statement at the end of May stating it would not roll out another range of fiscal stimulus measures as it did in 2008-2009. They might change their mind but at this point they want to stop tightening, support more infrastructure projects and consumption but nothing massive. People who expected a massive programme were too optimistic,” Ms Maisonneuve said.
Since the Chinese government’s statement on May 30, the Shanghai Composite index has fallen by 3 per cent to 2,311.9 points as at June 5.
Ms Maisonneuve said China’s trade surplus had narrowed because it is “sucking in imports” and growth in exports would slow.
Figures released last month showed that Chinese exports grew by 4.9 per cent in April from a year earlier and compared with 8.9 per cent of growth in March. Imports rose 0.3 per cent year on year in April, compared with March’s 5.3 per cent increase.
However, the manager said that contributions from net exports to the Chinese economy are “much less than they used to be”.