Opportunities in China despite longer-term economic imbalances

ASIA

Greece debt troubles and the risk of financial contagion within Europe have resulted in political rule bending and market intervention.

In Asia, politics remains a key determinant of economic policy, particularly in managing foreign exchange rates. However, the challenges for policy-makers in Asia are somewhat different as they manage improving economic growth and signs of inflation at home while remaining watchful of the troubles in Europe. The most visible political issue in Asia is the current civil unrest in Thailand. The ongoing protests and political instability remain an overhang on the domestic stockmarket. With the market standing on 10 times forward earnings and a discount to the regional valuation, a clear and...