In a recent analysis, Deutsche Bank presented a bullish outlook on China's economy, suggesting that global investors might soon recognize the untapped potential of Chinese stocks. The bank's report emphasizes that Chinese companies possess some of the strongest economic moats today, challenging the perception of Western superiority.
Peter Milliken, Deutsche Bank's Hong Kong-based analyst focusing on the Asia Pacific region, underscored the growing competitiveness of Chinese firms, particularly in high value-added sectors. \"Chinese companies are offering better value for money and often superior quality in many manufacturing sectors and increasingly in services,\" Milliken noted.
The report challenges the narrative of an economic slowdown in China, pointing to official statistics that show the country met its GDP growth target of 5% last year. This growth rate surpasses that of other major economies, including the U.S., Japan, and the European Union.
Contrary to fears of entering a period similar to Japan's lost decades, China is maintaining robust economic momentum. The report highlights two unique advantages that support sustained growth despite an aging population: a high level of automation, with about 70% of the world's industrial robots installed in China, and the Belt and Road Initiative, which links China's industrial capabilities to emerging markets across BRICS and ASEAN countries.
These factors not only enhance productivity but also open up new markets, potentially offsetting the demographic challenges. Milliken suggests that China's strategic economic planning and innovation-driven growth could lead to what might be considered an economic miracle in hindsight.
Reference(s):
cgtn.com
