China Fears Overblown But Stocks Still Won’t Surge

The slowdown in China’s economy may cause a lot of handwringing and headaches in the near term, but it’s a necessary and positive step over the long run.
Author:
Publish date:

The slowdown in China’s economy may cause a lot of handwringing and headaches in the near term, but it’s a necessary and positive step over the long run, said David Lafferty, chief market strategist at Natixis. 'We all know that the Chinese economy is driven by heavy manufacturing, exports, capital investment in infrastructure and not enough by the consumer,' said Lafferty.' To continue to grow at that rate without racking up a significant amount of debt, which they have been doing, they really need a long term balancing strategy.' China’s GDP rose 6.9% in 2015, its slowest pace in a quarter of a century. Similarly, Lafferty also sees the positive side of the current energy sector slump. He said the pain of low oil prices is concentrated to the energy sector and the upside of lower crude costs is widely spread across the economy.