Goldman Sachs Wealth Management’s Chief Investment Officer, Sharmin Mossavar-Rahmani, advises against investing in China despite the recent market decline.
Her primary concerns include:
- A projected economic slowdown: Mossavar-Rahmani anticipates a “steady slowdown” in China’s economy over the next decade, driven by the weakening of its traditional growth pillars – the property market, infrastructure, and exports.
- Policymaking uncertainty: The lack of transparency and inconsistencies in Chinese policymaking create significant concerns for investors, she emphasizes. This includes the emphasis on data security, restrictions on data movement, and the suspension of economic data releases, further hindering clear understanding of the economic landscape.
- Data opacity: Patchy and unclear economic data make it difficult to accurately assess China’s current and future economic performance. Mossavar-Rahmani echoes doubts held by many economists regarding the authenticity of official growth figures reported by China.
While short-term economic stimulus measures might be implemented, Mossavar-Rahmani remains cautious due to the ongoing struggles in the real estate sector and the lack of a definitive economic bottom.
Therefore, Goldman Sachs Wealth Management currently recommends against investing in China, advising clients to look elsewhere for investment opportunities.
