JPMAM: China to average 4.4% GDP growth over next decade

China_bicyclesChina’s GDP growth is likely to decelerate to an average 4.4% annually over the next 10 to 15 years amid a slowdown in real global growth (2.3%) over the same period, according to research by JP Morgan Asset Management. The findings were released in JPMAM’s 2020 Long-Term Capital Market Assumptions (LTCMAs), which forecast the average annual returns that investors can expect for more than 50 major asset classes. The backdrop to the LTCMAs include US-China trade tensions and a reversal in the trajectory of global monetary policy. China’s economy grew 6% year-on-year in the third quarter of 2019. While the predicted GDP growth for China is considerably lower than the double digits achieved over the past few decades, it is still sizeable for a large economy. “China is reaching a threshold at which improvements in peoples’ living standards tend to stagnate,” JPMAM said in a statement on November 7, 2019. “Although this so-called ‘middle income trap’ looms over China, we believe they will escape the trap because their economic growth will still prove robust enough to continue raising incomes, especially relative to such growth in other countries.” Foreign investors could be key beneficiaries as China opens its capital markets, which are likely to develop quicker than the rate of GDP growth. “Sector shifts will occur within markets and the composition of listed equities is likely to change significantly (though banks may well remain more prominent than elsewhere), creating nuanced investment opportunities,” said Hannah Anderson, global market strategist at JPMAM. The firm also drew attention to potential implications from the impact of slower Chinese growth of other Asian economies. “For example, China’s internal shift to greater economic reliance on consumers and services does not bode well for Asia ex-China industrial firms, but could be a boon for consumer-linked firms, especially as Chinese consumers continue to upgrade their purchases,” JPMAM said. ©2019 funds global asia

Sponsored Profiles

Sponsored feature: Asset allocators – How do you track your decisions?

Apr 06, 2020

Mark Barry, Head of Asset Allocation at Milestone Group, explores how a simple question can highlight opportunities to automate and streamline your asset allocation investment process.

Sponsored feature: How is DLT changing the global securities services landscape?

Oct 17, 2019

By Jeslyn Tan, global head of product management, securities services, at Deutsche Bank

Sponsored feature: A new base for fund distribution

Oct 16, 2019

To get the most value out of the digitisation of investment fund distribution, a blockchain-based infrastructure is fundamental. By Olivier Portenseigne, Managing Director and Chief Commercial Officer, Fundsquare.

Sponsored profile: Bridging the gap

Mar 11, 2019

Private equity is a core part of the business for Caceis’ Hong Kong office, which looks after clients in China and Europe. David Li, chief executive officer, explains why private equity enjoys strong client demand and how it is being used to fund China’s international infrastructure ambitions.

Executive Interviews

Executive interview: ‘China is the 800-pound gorilla’

Aug 04, 2020

Just over a year into his new role, Wai-Kwong Seck, chief executive officer at Eastspring Investments, discusses his business goals, the Covid-19 pandemic and China.

Executive interview: Understanding geographies

Apr 06, 2020

Margaret Harwood-Jones, co-head financing and securities services at Standard Chartered, shares her insights on platform standardisation, opportunities in Asia and regulatory change to encourage...


Hong Kong roundtable: A ‘fragile Goldilocks situation’

Apr 06, 2020

With the global economy at a crossroads, our panel of experts share their thoughts on the market conditions, geopolitical volatility and growth opportunities. Chaired by Romil Patel in Hong Kong.

Singapore roundtable: A horizon to hold long-term assets

Dec 12, 2019

Panellists discuss the geopolitical fractures concerning asset owners, Singapore as a hub for fintech start-ups and why it makes sense to raise capital from a Variable Capital Company (VCC). Chaired by Romil Patel in Singapore.