First State's Lau: 'I cannot remember the last time I was positive on China'

Holds less than 10% in direct China exposure

First State Stewart Asia manager Martin Lau has said he is "very cautious" on China, despite running three funds dedicated to the country, as demographics and government policy weigh on the region.

Lau (pictured), who co-manages 10 Asia vehicles for the firm, said his $2.7bn Asian Equity Plus fund has 40% allocated to China, compared to 43% for the MSCI Asia Pacific ex Japan index. However, the majority of this weighting comes via Hong Kong and Taiwan exposure, with only 5%-10% direct exposure to China compared to 22% for the index. Lau said: "We have been very cautious on China; I cannot remember the last time we were positive. We are very cautious on China's economic growth as it is already the second-largest economy in the world, so it cannot grow that much more. "We belie...