China’s economy will continue to grow and concerns about a bubble are overstated, says Anthony Bolton, a Fidelity International portfolio manager.
“I believe that China's economy could expand at nearly 8 percent a year between 2011 and 2020, and by more than 5 percent a year over the subsequent 10 years," he said.
"The sheer scale of China, with its population of more than 1.3 billion, means the world may never have seen anything like the economic transformation of China that lies ahead,” he said.
While investing in China is not without its risks, the country’s stock market and economic effect could be profound, Bolton told the Telegraph.
“At the end of 2009, China represented only about 2% of the total capitalization of global equity markets. A combination of new issues and market growth will, I believe, lead to China’s stock market becoming the world’s second largest within the next 20 years," he said.
Bolton, who exited his retirement to manage the Fidelity China Special Situations, said he predicts China will surpass Japan and could emerge as the “world's dominant economy within the next 20 years.”
He said he does not expect to see an investment bubble in China.
“Also, I think the clock started ticking again in November 2008 when the market recovery began and in my experience bubbles take several years to develop, not a little over one," he said.
"I am confident that for investors with a long-term view there will be very many stock-picking opportunities in China in years to come,” Bolton said.
Goldman Sachs Group Chief Economist Jim O’Neill said China could be ready to halt its economy because of inflation, Bloomberg reported.
O’Neill has estimated China’s economy is increasing between 12 percent and 14 percent and will grow to 1.4 percent over the year
“They need to do something to slow the economy down and deal with the inflation consequences. The more they do — and the sooner — the better.”
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