Chinese recovery could be 'biggest disappointment yet'
Research from Societe Generale dismisses "the Chinese economic miracle as the sickest joke yet played on investors," and warns investors against believing Chinese government data that the world's fourth largest economy grew 6.1% in the 12 months ended March 31.
Albert Edwards, a strategist at SG, said Chinese authorities "smooth" data turning points, and that the first quarter GDP figure, which is touted as proof of the turnaround, was probably closer to an annual rate of 3.5%.
"The continued enthusiasm for all things China reminds me so much of the way investors were almost totally blind to the fact the US growth miracle was built on sand," Edwards said in a report. "If China is doing so well, how come Chinese company profits in the year to April are down some 30% year-on-year?"
New Zealand Funds Management, which manages more than $1 billion on behalf of financial advisers, is also cold on the Chinese hype.
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