China: Lost in transition?
Nikko AM Australia’s commodity analyst, James Eginton, recently participated in a research trip to China to see first-hand how the economic transition is progressing. The transition - perhaps the largest the world will ever see - has significant implications for global growth. A country where economic growth has been built on infrastructure and residential construction is now trying to resemble that of the Western world where the consumer and services dominate. No longer can China rely on stimulating heavy construction to drive growth. Commodity demand is waning and the capacity created in manufacturing by China, as it grew from the early 2000s, now looks to have been overly optimistic. Overcapacity issues are likely to be addressed in coming years but this is not a painless process. Supply responses are necessary from miners to deal with the demand shortfalls. This has not been a very conducive environment for improving commodity prices in past cycles. READ THE FULL ARTICLE. (VIEW LINK)
Nikko Asset Management is one of Asia’s largest asset managers, providing high-conviction, active fund management across a range of Equity, Fixed Income, Multi-Asset and Alternative strategies. In April 2021, Yarra Capital Management acquired...