The next five-year plan from the Chinese government is likely to move the country from deflation to reflation, according to portfolio manager of Man GLG Asia Opportunities Fund, Andrew Swan.
He says the focus will be on domestic demand to lift consumption levels in the economy.
“The Chinese government has described its next five-year plan as aiming to vigorously improve consumption as a share of GDP. This reflects the government’s desire to achieve balanced growth by providing greater economic incentives to increase household disposable income and boost consumer confidence to spend more in the local economy.
“If all the goals set out in the five-year plan are delivered, it will positively impact investment markets as increased consumption will drive up corporate profits of Chinese companies,” says Mr Swan.
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