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Short-term relief of China's growth concerns could be a welcome turning point for global investors. The Shanghai Composite was one of the worst performing stock indices in the world last year, but it has risen by more than 20% in 2019 so far.
"In China, what really controls growth, at least for the moment, is the availability of liquidity, and the availability of liquidity is an issue at the government's initiative," said David Wong. partner of Asian group of alternative investment PAG, during a panel AVCJ China Forum in Beijing last week.
In addition, debt fears could be exaggerated, according to Wong. In terms of leverage, the dollar debt of government and Chinese companies in the country is "tiny" compared to the levels of most Southeast Asian countries during the Asian financial crisis. the late 1990s, he said.
"Given this (and the tax base), I think we are not over-indebted in China," said Wong. "Therefore, in the foreseeable future, this supercycle of growth will continue until the leverage effect can no longer be maintained even within the framework of a closed-cap account system. . "
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