With growth in the Chinese economy appearing to be slowing, recent changes to leadership in the Communist Party are being closely watched by investors hoping for a boost.
Some analysts have been calling for the whole economic development model in China to be radically changed.
They have called for a bigger role for the private sector, with more encouragement for greater consumer spending.
Despite the logic of these suggestions, there is likely to be a great deal of resistance from the status quo, with powerful vested interests from within the Communist Party.
A new briefing note from Baring Asset Management has raised some interest points.
Agnes Deng, Head of Hong Kong China Equities, explains that the imminence of leadership changes has been a negative factor for investors for several months.
Now that the leadership transition has been completed, Barings expects to see markets respond positively. They expect to see more of a free hand for the new leadership, following the rapid consolidation of power by Mr Xi Jinping.
Whilst Mr Xi Jinping might be challenged on his plans for reform, expressing the need to improve the overall wellbeing of Chinese citizens is likely to be popular. This echoed recent calls by President Hu Jintao for a goal to double average household incomes over the next ten years.
Here at Informed Choice, we would like to see further economic growth in China at a more sustainable level than that experienced over the past decade.
Economic development in China has important implications for the global economy, with many investors now indirectly exposed to the success or otherwise of this superpower.
Photo credit: Flickr/Dainis Matisons
