Goldman Sachs Wealth Management CIO's warning: Don't invest in China because…

Sharmin Mossavar-Rahmani said, “It is not clear what the overall general direction of policy will be long term."

China’s big stock-market declines are not crucial indicators of whether investment should be made in the country, chief investment officer of Goldman Sachs Group Inc.’s wealth-management business said as per Bloomberg. Sharmin Mossavar-Rahmani said, “All our clients are asking us that question — given how cheap China appears, people inevitably say, well, has it discounted the worst news? Our view is that one should not invest in China.”

China's president Xi Jinping (AFP)

Citing reasons, she said that there are expectations for a steady slowdown in the economy over the next decade as the country's property market, infrastructure and exports are struggling amid lack of economic data. The comments come as China has focussed on information security putting curbs on data availability outside the country. The statistics bureau also suspended for a time some unemployment figures and Beijing discontinued a decades-long tradition of annual press briefings at a key gathering.

Sharmin Mossavar-Rahmani said, “It is not clear what the overall general direction of policy will be long term. Policy uncertainties generally put a little bit of a cap on the equity market.”

Although, there may be some short-term stimulus measures coming as China’s real estate sector hasn’t found the bottom yet, she said, adding, “Data is unclear — we really don’t have a good grasp of what growth was last year or what growth will be this year. Even though China formally published a growth rate above 5% for 2023, “most people think that is not the real growth number — it was actually a lot weaker,” she said, concluding, “We don’t recommend clients move into China at this point."