China’s market may look cheap after a steep drop over the past year, but don’t be fooled into investing, said Goldman Sachs Wealth Management CIO Sharmin Mossavar-Rahmani.
Although China is the world’s second-largest economy, fueled a 5.2% expansion in 2023 and recently debuted a 5% growth forecast for 2024, economics don’t necessarily see the country meeting this ambiguous goal. Mossavar-Rahmani also cited skepticism about the legitimacy of last year’s reported growth, saying, “We really don’t have a good grasp of what growth was last year, or what growth will be this year.”
Investors should consider China’s trajectory over the next 10 years, but the current economic challenges and murky long-term policy solutions indicates that things will be unclear for a long time to come. Economists note a sluggish property sector, new energy sector investment slowdowns, government debt crackdowns and suboptimal January-February figures.
“If we think of the three pillars of property, infrastructure and exports, we think all those pillars are substantially weakened, and so we don’t recommend clients move into China at this point,” Mossavar-Rahmani said.
