Int’l investment banks optimistic about Chinese economy (2)

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Attitudes changes come from Interest-oriented priority

Although foreign investment banks began to hold positive expectations, many institutions cut the expected China's economic growth two months ago. In the first quarter, one of the three major credit rating agencies Fitch has downgraded credit rating of Chinese currency debt. In the second quarter, although Chinese economy has been stabilized, a large number of international institutional investors still worried about a hard landing of the economy and doubted about the principle of “advancing steadily”. Some of them even thought that overcapacity, sluggish domestic demand and other issues would make China no longer a powerful engine for the world economy.

Investment Banks rapidly changing their attitudes is decided by their own nature. China Ruiku Research Institute vice president Gao Lianui pointed out that the main job of the international investment bank is short-term studies. Naturally, it is what they do to make appropriate judgments based on short-term factors.
Under the current situation where emerging markets face challenges like capital flight and weak market, data showing China's economy is stabilizing will undoubtedly make international investors change their attitudes.

However, some people remain relatively cautious on China's economic prospects. UBS China economist Wang Tao said how strong China's economic recovery will be and how long it will last will have to depend on the strength of domestic and external demand as well as the future policy direction. The bank expects China's recovery will be more moderate.

State Council Counselor Tang Min said any economic development is actually conducted in fluctuation. No matter how foreign investment banks changes their tune, we should have a general idea of the situation.

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