BlackRock's chief investment strategist, Russ Koesterich, suggests investors should view China as a value rather than a growth play. He explains that much of China's underperformance can be attributed to investors being stuck in a growth-play mentality. Investors are focused on seeing signs of faster Chinese growth - in the form of more accomodative monetary policy or aggressive fiscal stimulus - at a time when the country's government is becoming more tolerant of slower growth in exchange for structural reform. Thus, investors continue to be disappointed, and Chinese stocks suffer. Koesterich is overweight Chinese equities as the MSCI China index trades at under 9 times forward earnings while the MSCI Emerging Market index and the MSCI World index trade at 10.6 times and 15 times respectively. According to Koesterich, despite slowing growth, Chinese stocks are still undervalued relative to other equities. (VIEW LINK)
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