Although geopolitical risks continue to weigh on China regarding tensions with the US, Deutsche Bank remains positive on the market with expectations of stabilization in the property sector.
Deutsche Bank Private Bank is currently positive on the Chinese market on a tactical, medium and long-term basis. This is despite market concerns about geopolitical risks, especially concerning relations with the US which is facing an election year.
«While we have all these disturbing conversations about sanctions in the future, we look at China still in a very constructive way,» said Stefanie Holtze-Jen, Deutsche Bank Private Bank’s APAC chief investment officer, at a media briefing attended by finews.asia. «We’ve always been looking at China as a second-half opportunity [in 2024].»
Consumer Stimulus
According to Holtze-Jen, China has shifted away from being an export-oriented economy to focusing more on stimulating consumer demand. Authorities have rolled out related measures, such as a new plan to encourage consumers to trade in used goods in exchange for new, greener ones.
As a result of various tailwinds, the German private bank recently amended its GDP forecast for China from 4.8 percent to 5 percent in 2024.
Property Troubles
Nonetheless, there are other domestic risks, most notably from the property sector. While a housing rescue package was recently introduced, Deutsche Bank believes it to only help in the medium term though it expects the slowdown in real estate investments to largely level off this year.
«The next big meeting we are looking at is the July Communist Party plenum,» added Holtze-Jen on the timing for the potential roll-out of more stimulus. Aside from China, the bank is also optimistic about the broader APAC market, including Japan. It is particularly positive on the tech, industrial and consumer sectors.
