- The next phase of growth in China might be characterized by slower, yet higher quality and more sustainable growth, even if only a portion of the reforms are actually implemented.
- The impact of China’s reforms on the financial sector could be significant. Reforms could open up new business opportunities for banks and improve the health of local government loans.
- Consumer spending could also see a boost from reforms to rural land rights, the household registration system and modification of China’s one-child policy, which may result in putting more money in the hands of consumers, increasing mobility of the labor force and potentially lifting consumption, respectively.
- Chinese stock valuations could rise as a result of higher quality growth amid negative investor sentiment toward emerging markets, creating an opportunity for risk-tolerant equity investors to take advantage of buying opportunities.
- There could be significant risks in China in the near-term, including increased volatility and uncertainty about the pace of growth and reform momentum as China’s policy makers balance the reforms with economic stability.
New Charles Schwab Investing Whitepaper: Reform Plans Could Make Chinese Stocks Attractive For Investors
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