Stephen Wood, the New York-based chief market strategist for Russell Investments, which manages $140 billion, said China’s policy tightening cycle isn’t over. Wood made the comments by e-mail.
On China’s economy and policies:
“It appears that a soft landing is most likely, though it is clear that the central government’s tightening cycle is not over. Perhaps toward the end of 2010 or early 2011, we may have a clearer indication from Chinese authorities about when they will end this phase.
“While it is not Russell’s official forecast, estimates of Chinese GDP are expecting a low to mid 8 percent expansion. That seems reasonable to me, especially if one expects that the larger portion of the Chinese cycle is behind us. Low teens growth has been carefully and successfully avoided as authorities seek to slow down asset bubbles formation. 2011 is likely to see Chinese policy officially shift into neutral.”
On what industries will benefit:
“Exports coming from heavy industry and manufacturing will continue to benefit from policy and a growing (albeit slowly) global economy.”