Road to recovery: China’s recovery affects Asia and the rest of the world
While economic data coming out of China continues to improve, it is by no means guaranteed that the world’s second largest economy is safely on the road to recovery. In 2012, China saw economic growth hit its lowest level for 13 years, which sent reverberations around the region. For more than a decade, it was the shining star of Asia, appearing on every investor’s radar screen as asset allocations were rebalanced. But in 2012 observers started to worry about China’s engineered slowdown as it began its shift from export-driven demand to domestic growth.
Property investors also had been reweighting their portfolios in favour of Asia because the growth story looked so convincing. But if China can’t shake off its slowdown, this could have a huge impact on the region as a whole as it relies so heavily on China as a major trading partner. A big question mark now hangs over Asia for investors who had been attracted to the stellar growth of the region, fuelled mainly by the