11 Mar Oliver's Insights – Is China a bubble that's about to burst?
This note looks at concerns that China is a bubble that’s about to burst.
The key points are as follows:
– Concerns that China is a bubble about to burst are unjustified. There is no evidence of generalised over-investment, China’s reliance on exports is overstated and likely to diminish with consumption taking a greater role, it is very hard to argue there is an asset bubble and China’s banks are in a reasonable shape.
– Although further monetary tightening is likely in China, we don’t anticipate a bust any time soon and continue to expect Chinese gross domestic product growth of around 10% this year.
– This is positive for the commodity price outlook.