Key points on China

China has received a significant amount of negative press of late. believe it is important to remain focused on the facts and take a balanced approach to investing. Below we outline in bullet point form key points that investors should bear in mind when making decisions in such volatile markets.

The positives

1. Equity market moves in context aren’t that bad – They have only retraced back to levels seen last year
2. Mainly only Chinese retail investors effected – global wealth not tied to China stock market
3. We were already aware that China was slowing- No surprise/shock
4. China is taking measures to address their slow down
5. They have ample resources at their disposal to counter weakening growth
6. The government remains committed to support the economy at any cost
7. There is a transition away from manufacturing to a consumer driven economy – this process will lead to further economic growth
8. The US economy, the world’s largest economy, continues to grow at a moderate pace.

The negatives

1. The volatility is effecting consumer and investor confidence
2. The Chinese equity market is having spill over/contagious effects on other global equity markets
3. The devaluation of the Yuan may offset what the ECB and BoJ are trying to achieve

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