China has been dominating the headlines and moving the markets over the course of the past few months. In this video from April 2016, Henk Potts, Director of Global Research and Investments for Barclays, gives his views on China’s economic outlook.

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Video transcript

“China has been dominating the headlines and moving the markets over the course of the past few months. A number of facts have been concerning market participants. Number one is the violent volatility that we’ve seen in domestic financial markets. Number two, the devaluation of its currency. There are concerns, number three, about the ability of policy makers to stimulate growth and stabilize markets when required in this ultimate command economy. Perhaps they’ve lost some of that control. But perhaps the most important is a growth profile for the world’s second largest economy. Of course China’s been slowing down. It’s from a much bigger base than we’ve seen over the course of the past few years, an economy in transition, and that shines through in terms of the numbers. Industrial production numbers have come down, fixed investment down to its lowest level in 14 years.

“The good news is some of that slack has been picked up by stronger domestic demand, retail sales numbers have been growing very robustly indeed. When you look at China, we still expect some relatively strong growth over the course of the next few years.

“We’re not talking about the hard landing many economists have been anticipating. What we’re talking about is a slower glide path to more reliable growth over the course of the next few years. So we’re still talking about growth of 6 percent this year, down to 5.8 percent next year, but certainly not the meltdown that many economists have been predicting.”

Henk Potts, Director of Global Research and Investments, Barclays.

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