The writer is head of global index portfolio management at Franklin Templeton China’s stock market has certainly been battered recently, rattling both consumer and investor confidence. But we shouldn’t be too quick to categorise this disappointing phase as a crisis. Investors should tread cautiously, of course, given that Chinese consumers remain nervous about a still-shaky property market and high youth unemployment.
But this extraordinary pace of economic growth was always bound to hit some speed bumps and it’s important to remember that China is still undergoing a major transition from export-led growth to a more sustainable model that is increasingly driven by consumption and services. China’s passenger vehicle exports, and particularly its electric vehicle sales, are other key areas of progress to watch.