Investors better to remain coolheaded about Chinese economy

Updated: 2016-09-30 09:30


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BEIJING - Billionaire investor George Soros was found to have invested in China's fifth biggest State-owned lender, which raised a public uproar as many still remembered that Soros has never stopped bad-mouthing China's economy.

The dramatic scenario taught investors a lesson that judging Chinese economy needs to keep a cool headed mind for an objective conclusion rather than believing in the interest-driven Soros. To benefit from Chinese economic transition, investors should abandon the habit of being a copycat, and instead cultivate the ability of judging and behaving independently.

In fact, China's economic fundamentals for long-term economic growth remain sound no matter how foreign forces with ulterior motives hype up China's economic weakness.

For the longer term, the Chinese economy has intrinsic tenacity, huge potential and ample leeway, as Chinese government has been persisting with a proactive fiscal policy and prudent monetary policy, while pushing the supply-side structural reforms.

For the near term, both the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have said that China's economic outlook is positive, with an expected growth rate as high as 6.6 percent this year, which is only a dream for many countries to achieve.

To lead the market for the benefit of himself and achieve profitability, it is understandable that the billionaire creates a volatile atmosphere and misleads other investors. The gap between his words and deeds depend on the rule and regulation of the investment market, and is also based on China's economic fundamentals.

Meanwhile, the complexity and diversity, which are rooted in the economic transition where engines are iterating and dynamics are changing, may have confused those "super players," making them lag behind changeable situations.

On the other hand, China's economic transition from traditional to new engines takes time. China's economy faces such problems such as high and rising corporate debts, structural excess capacity and an increasingly large, opaque and interconnected financial sector. However, China is not facing a banking crisis, and still sees a high ratio of funding from deposit.

Moreover, the Chinese leadership is determined to conduct the reform, the fiscal and financial sectors have ample tools and resources to apply, and the Chinese economy enjoys great room for maneuver and endogenous dynamic.

In such a context, China's economy will never be reduced to a wonderland for speculators and adventurers. Only those visionaries who are good at discovering new economies and exploring new dynamics can grasp opportunities and share prosperity arising from the Chinese growth.