1. Newsroom
  2. Looking Beyond China
Expertise 22.11.2023

Looking Beyond China

Looking Beyond China

As UBP launches into Investment Outlook 2024, this year titled Back to the Future, our Co-CEO Asset Management & Head of Investment Management Michaël Lok, Group Chief Strategist Norman Villamin, and Chief Economist Patrice Gautry shine a spotlight on one of its key themes: looking back at events that have led China into a post-bubble restructuring process. Our expert recommends that during this phase China-focused investors look beyond the world’s second-largest economy at other dynamic markets, such as India.

Like post-1989 Japan, post-1998 Asia, the post-2008 US, and post-2011 Europe, China is in a post-bubble economic restructuring phase. The country announced its move away from real estate-led growth in 2011 However, it was only with President Xi Jinping’s December 2016 exhortation that “houses are built to be lived in, not for speculation” that the painful restructuring of its bloated real estate sector began in earnest. 

Indeed, lessons from post-1989 Japan show the perils of delaying restructuring and reform. Thus, while calls for large-scale stimulus packages have been persistent in the face of growing economic stress, China now appears to be seeking, as indeed it should, to continue unwinding real estate excesses.

Unlike post-bubble economic restructurings of the past, this one in China is being complicated by the shifts in the geopolitical order. They began with the Trump trade wars of 2018–19 and were accelerated by Russia’s 2022 invasion of Ukraine, limiting China’s ability to rely on currency weakness and export growth to cushion the impact of reforms on overall economic growth. 

For investors, lessons from other post-bubble economies globally suggest that passive investments in China should be avoided. Instead, tactical investors should focus on the global industrial cycle while China-focused investors should concentrate on longer rather than shorter time horizons in new economic growth segments that will drive the next phase of China’s development.

For emerging markets, investors can look to Indian equities for premium economic and, more importantly, earnings growth to drive returns.

Download the brochure
Michaël Lok Michaël Lok
Co-CEO Asset Management & Group CIO
Patrice Gautry Patrice Gautry
Chief Economist
Norman Villamin Norman Villamin
Group Chief Strategist

Actions globales

Investir dans des sociétés affichant un profil de création de valeur supérieur et pérenne.

A lire également

Expertise 21.05.2024

Embracing regenerative agriculture for sustainable growth

UBP’s impact team believes in the pivotal role regenerative agriculture has to play in addressing environmental challenges and fostering long-term prosperity. This theme can provide fertile ground for investors looking at impact investing.

Expertise 08.05.2024

UBP House View - May 2024

In light of the extended duration of high interest rates, we’re employing a carry strategy, ramping up our allocation to high-yield bonds.

Expertise 26.04.2024

Swiss equities back on the radar

Following a relatively lacklustre performance in 2023 and the Swiss National Bank’s recent interest rate cut, is now the time to revisit the Swiss equity opportunity set? In this Investment Rendez-Vous podcast, Eleanor Taylor Jolidon, co-head of UBP’s Swiss and Global Equity team, walks us through Swiss business models, current valuations and industries of particular interest.