Financial firepower of Beijing has kept China economy near double-digit rates

EMERGING MARKETS

That economic growth does not necessarily equate to market performance is well understood and the experience of China in the last year is a good example of this.

The full financial firepower of Beijing, combined with the Government’s tremendous political willpower, to create a stimulus package of unprecedented scale kept the economy growing near double-digit rates through the teeth of developed market collapse. Yet by mid-2009, investors’ attention had started to question the ‘kool-aid’ and, even though the market has underperformed less economically robust global peers for almost a year, concerns still prevail as to whether stimulus can be withdrawn as successfully as it was injected. Despite the alarmist headlines from the chorus of ultra-be...