NEW YORK, Jan. 25 (Xinhua) -- Investors and Western news outlets focus on a narrow set of indicators and neglect the robust base when evaluating China's economy, according to U.S. observers.
Despite the heavy economic headwinds caused by the property sector, China is still putting out reasonable macroeconomic growth numbers as well as displaying microeconomic robustness across a number of private-led industrial sectors, including in advanced manufacturing, said Sourabh Gupta, a senior fellow at the Washington-based Institute for China-America Studies.
"Furthermore, this is all happening without the government having to take recourse to 'flood irrigation' measures (huge fiscal and monetary subsidies)," Gupta told Xinhua in a recent interview.
All this plus the heavy government emphasis over the past eight months on supporting the private sector bodes well for the future, especially once the property sector's health becomes more aligned with fundamentals, Gupta said.
"Western news outlets are more interested in dwelling on bad, scandalous or short-term news out of China rather than objectively assessing issues from a more considered or medium-term perspective," Gupta further said.
Gupta suggested one must bear that in mind when reading analyses by Western news outlets.
The volatility in the Hong Kong stock market on Jan. 17 was not due to economic releases from China but rather forced selling from popular Callable Bull/Bear Contracts (CBBCs), said Brendan Ahern, chief investment officer with U.S.-based asset management firm Krane Funds Advisors LLC, a specialist investment management firm focused on China, climate, and other uncorrelated assets.
"We believe equity investors may be placing too much emphasis on weaker demographic data," Ahern told Xinhua.
Export-driven economies don't need populations as large as domestic-driven countries for their stock markets to perform well, said Ahern, citing the examples of Japan and South Korea.
Still, Ahern added that over the long run, the demographic issue will have to be addressed as China's economy becomes increasingly oriented toward the consumer.
The reason the Chinese economy is being held back is because of "legacy" reasons, which primarily refers to the property sector, said Gupta.
Indeed, there are multiple reasons to be upbeat about the Chinese economic outlook.
"The Chinese economy enjoys healthy economic growth drivers, as can be seen in the private fixed asset investment numbers. Entrepreneurs and business folks are investing in the future," Gupta added.
China's consumer recovery in 2023 was focused on services and not as broad as markets had anticipated, noted a report on the outlook for China in 2024 issued by Krane Funds Advisors on Jan. 16.
"In 2024, we believe the recovery could broaden and accelerate while stimulus measures implemented in 2023 may begin to have a positive impact on the economy and stock market," said the report.
China's gross domestic product (GDP) growth rates in Q4 and 2023 fell largely in line with market consensus and expectations of Bank of America (BofA) Global Research, according to a research note by BofA Global Research on Jan. 17.
"We believe Chinese policymakers are fully aware of growth headwinds, and will step up their effort in policy easing going forward," said economists with BofA Global Research.
China's GDP grew 5.2 percent year on year to a new high of 126.06 trillion yuan (about 17.7 trillion U.S. dollars) in 2023, higher than 3 percent in 2022 and the government's annual target of around 5 percent, according to data issued by China's National Bureau of Statistics on Jan. 17. ■