CHINA - The Chinese government will continue to tread cautiously over policy measures aimed at cooling the real estate market amid the near-certain postponement of a property tax originally scheduled for introduction this month, according to Barings.

In a bullish forecast for the Chinese economy, Barings fund manager William Fong said he was only "moderately concerned" by the likely impact of recent government measures, including tightening aimed at cooling property, although he acknowledged inflation and needed monitoring. 

He said the government was trying to maintain growth rather than merely "dampen everything".

He added: "The export recovery will continue in the short term, and in the mid-term, the outlook is favourable to equities."

Fong pointed last week to reduced GDP volatility as the government pulled infrastructure funding, instead gearing the economy towards domestic consumption.

He cited the government's track record of restructuring the economy after a bad year in 2008-09.

The primary economic driver, he said, has switched from exports to domestic consumption: "When Chinese people get higher pay, they spend it."

Barings fund manager Soo Hai Lim added it was time to look beyond India and China to the rest of the region.

"ASEAN economies used to be known as Asian tigers," he said.

"That was forgotten post-crisis, and there was a focus on India and China. Now's the time to look at them again."

He pointed to largely successful post-crisis restructuring, labour arbitrage, niche growth industries in frontier and non-frontier Asian economies and the re-routing of formerly considerable defence spending in countries such as Sri Lanka.

"The regional story is beginning to gain traction with investors," Lim said.
 

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