China a potential 'asset bubble' - PSigma

China has the potential to be the world's next asset bubble, PSigma Investment Management suggests.

Tom Becket, the firm's head of global investment management, warns growing overcapacity in the economy could lead to disappointment over profit-growth expectations next year. In addition, he is concerned China could be following the template set by Japan policy makers in the 1980s, using stimulus measures to switch the emphasis of growth from exports to domestic consumption. "So far they are doing a respectable job, including cutting car taxes, providing subsidies for white-goods and urging their banks to go on a lending spree to end all lending sprees," he says. But while these ar...