Europe versus China in perspective: “Not many people realise that the economy of just one province of China – Henan province – is greater than the whole Greek economy,” points out David Urquhart, Portfolio Manager for the Fidelity Asia Fund. The Greek economy is about the size of China’s fifth largest province, Henan, which at around $330 billion is similar to that of Thailand.
“Another province in China, Hunan, has an economy greater than that of Portugal,” he says. “Hunan province, with its $232bn economy is similar to that of Singapore.”
Mr Urquhart adds “the Chinese economy grows the equivalent of three Greek economies every year!
“China recently reported second quarter GDP growth of 9.5% (better than market expectations) and growth in Chinese service industries accelerated to 9%, while growth in secondary industries rose 11% and industrial production jumped 15% year-on-year at the end of June.”
He notes that China recently joined the USA (along with Russia) as the only countries having more than 100 billionaires. “One in four billionaires are from in Asia and the region has more ‘ten-figure’ earners than Europe for the first time. “This is creating more local consumer demand. China (including Hong Kong) accounted for 26% of Swiss watch exports lasted year and accounts for 25% of Airbus business jet sales. China, India and Indonesia account for 30% of global mobile phone subscribers.
“Asian companies are well placed to take advantage of opportunities in their own back yard, Western companies are also continuing to invest and expand in Asia, as highlighted by recent IPOs in Hong Kong of luxury brands like Prada.
“Asian countries have recently delivered the majority of growth in the world, attracting investment by global corporations to participate in the region’s growth.
“By investing in Asia, retail investors have been able to gain direct exposure to such investment opportunities, and avoid the drag from risks associated with the fiscal and financial sector imbalances in countries like Greece, Italy, Spain, Ireland and other ‘developed’ economies.”