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Director’s Cut
China can scale great income wall
In the latest China Diviner Paul Cavey looks at the structural outlook for China’s
economy. He includes the translation of a report originally published by Liu
Shinjin, a leading economist from a Chinese government think tank.
The report compares the history of industrialisation of countries around the world
to identify the differences between countries that fall into a middle income trap,
and those that surpass the high income “great wall” and go on to become one of
the world’s technology leaders. The good news is that with GDP per capita near
Int$8,000 in 2010, Paul suggests that China has already avoided the middle
income trap that typically occurs in the Int$4-6,000 range.
That said, after 3-5 years, China’s GDP will reach Int$11,000 per capita, the
level achieved by successful catch-up countries when they scaled the “great
wall”. On this basis, China’s economic growth would be expected to slow around
2015. Paul also notes the degree of slowing depends on policy reforms in
China, such as improving healthcare and education, ending discrimination
against farmers, promoting merit based employment and financial reforms.
Paul argues that implementing some of these reforms will be difficult. But China
policy makers have a clear incentive to act, as the conclusions of the think tank
suggest the risk of sharp growth slowdown that would be hard to reverse. For
anyone invested in an asset exposed to China’s growth – a very long list – the
latest China Diviner is definitely a report worth reading.
Highlights
After conducting an in-depth survey of around 2,200 people, Gary Pinge
believes Sands China (1928 HK) is the most preferred Macau casino.
Kieran Calder has upgraded two Malaysian beer stocks, Guinness Anchor
(GUIN MK) and Carlsberg Malaysia (CAB MK) to Outperform.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Director’s Cut
China can scale great income wall
In the latest China Diviner Paul Cavey looks at the structural outlook for China’s
economy. He includes the translation of a report originally published by Liu
Shinjin, a leading economist from a Chinese government think tank.
The report compares the history of industrialisation of countries around the world
to identify the differences between countries that fall into a middle income trap,
and those that surpass the high income “great wall” and go on to become one of
the world’s technology leaders. The good news is that with GDP per capita near
Int$8,000 in 2010, Paul suggests that China has already avoided the middle
income trap that typically occurs in the Int$4-6,000 range.
That said, after 3-5 years, China’s GDP will reach Int$11,000 per capita, the
level achieved by successful catch-up countries when they scaled the “great
wall”. On this basis, China’s economic growth would be expected to slow around
2015. Paul also notes the degree of slowing depends on policy reforms in
China, such as improving healthcare and education, ending discrimination
against farmers, promoting merit based employment and financial reforms.
Paul argues that implementing some of these reforms will be difficult. But China
policy makers have a clear incentive to act, as the conclusions of the think tank
suggest the risk of sharp growth slowdown that would be hard to reverse. For
anyone invested in an asset exposed to China’s growth – a very long list – the
latest China Diviner is definitely a report worth reading.
Highlights
After conducting an in-depth survey of around 2,200 people, Gary Pinge
believes Sands China (1928 HK) is the most preferred Macau casino.
Kieran Calder has upgraded two Malaysian beer stocks, Guinness Anchor
(GUIN MK) and Carlsberg Malaysia (CAB MK) to Outperform.
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