Shenzhen, China-based broker-dealer, Fox Capital Partners, has told clients that it has confidence in the Chinese authorities’ efforts to rebalance the country’s economy to reflect a greater reliance upon domestic consumption will ultimately prove successful.
Writing in the firm’s latest scheduled client briefing, Gordon Li-Chao, chief economist at Fox Capital Partners suggested that the ongoing slump in China’s industrial output stats and export statistics were not entirely down to the global economic slowdown.
“Policymakers have spent much of the last three years engaged in measures aimed at reducing China’s dependence on exports and, instead, stimulating demand from the burgeoning middle classes created by the economic miracle the country has undergone over the past two and a half decades,” he wrote.
According to Fox Capital Partners, although industrial output slowed in October, posting meager gains not seen since the global credit crisis, China’s retail sales in the same month surged 11% over the same month last year; slightly higher than September’s 10.9% and driven by the resilience of the Chinese consumer. China’s consumers shrugged off concerns about a slowing economy and spent heavily on mobile phones, household items and office supplies.
“We have no doubts whatsoever that the consumption-based economic data over the next few quarters will support our belief that China will easily avoid a deeper downtown while also vindicating our decision to remain overweight Chinese equities despite the volatility seen over the summer months,” Li-Chao added.
Fox Capital Partners remains bullish on the outlook for China’s equity markets and has advised clients to acquire blue chip stocks on price dips.
About Fox Capital Partners
Fox Capital Partners is a successful, independent investment management practice established in China and headquartered in Shenzhen. Our highly-qualified professionals advise on a wide array of wealth accrual, preservation and portfolio management solutions aimed at affluent individuals and families in Asia and elsewhere.
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