Global emerging markets roundtable THE PANEL
Alasdair Gill: That chimes with the conver- sations we are having with a lot of DB schemes. They are generally on journey plans to exit from growth assets, particu- larly equities. So, emerging markets can be one of the first to be ditched. On the DC side, we agree that equities are part of any long-term growth portfolio.
Alasdair Gill
Head of investments, Scotland XPS Pensions
Amandeep Shihn Head of emerging markets equity & sustainable investment manager research Willis Towers Watson
Georg Inderst
Independent adviser (advises on infrastructure + green investments) Inderst Advisory
Ian Smith Portfolio manager Newton Investment Management
Is growth easing in China a concern? Ian Smith: China is going through a tough patch. There were tighter monetary con- ditions in China coming out of Covid, after it had weathered the initial Covid pe- riod, arguably, better than other coun- tries. That coincided with policies designed to address some of the imbal- ances in the economy, particularly in the real estate industry. All these things have brought to a head a slower growth period. When you look at how policy is likely to evolve globally, China stands out as the one economy where easing will continue in the near-to-medium term. But there are question marks on the extent to which that will stimulate growth.
Kate Mead Investment director Cambridge Associates
Rob Treich
Head of public markets London CIV
Could the real estate debt crisis impact other sectors in the country? Smith: The debt problem is structural. Huge amounts of capital have flowed into China in the past 30 years, which has been intermediated through the banking system. A lot of this money was magni- fied and channelled into fixed assets. As a result, the real estate industry, which was less than 10% of the economy in 2000, is now 30% of the economy, which is too large.
Alan Pickering President BESTrustees
Dinesh Visavadia Director
Independent Trustee Services
There is no doubt we will see a rationali- sation of that industry. The ambition of the Chinese authorities is to handle that in a stage-managed way rather than cause an abrupt shock, which would send shock waves across the global economy. A lot of economic actors have been pre- paring for such a peaking of property investment in China. We have already seen a rationalisation of many compo-
40 | portfolio institutional | May 2022 | issue 113
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