China to Stay in 7.5% GDP Growth Range: Wilson

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Oct. 18 (Bloomberg) -- Andrew Wilson, EMEA CEO at Goldman Sachs Asset Management, talks with Francine Lacqua about future growth in China and offers his outlook on the European earnings season. He speaks on Bloomberg Television’s “On The Move.”

Around, and you.

Talk to me a little bit about china.

You have been quite bullish on china.

You say it is going to grow and at the rate they say it will.

The gdp numbers came up a little bit higher than we expected.

It seems that growth is going to be about 7.5%. we are going to stay in this 7.5% range.

The hard part for china is that if you break down and look at the details of the gdp numbers, it is still really driven by investment.

Retail sales is growing just over 13%, but the rebalancing that we've been looking for another seven looking for really isn't taking shape here it is still being driven by investment and at some point we need to see that rebalancing taking place, right?

Again, the details on the investment side are really on the property sector.

It is up 35%. again, we had a bit of a surprise or shock earlier this year when we tried to clamp down on the shadow banking system.

They stepped back from that and then we're back to investment and providing credit again.

Our longer-term concern is how do you get the rebalancing -- without shock.

And that is very hard to do.

We do think the government is committed to the 7.5% target and as we have seen from the events of the last six months, if reduced activity slow, they do some more investments in infrastructure and they get growth act up to 7.5%. andrew, how you would play this is trite as much as you can to have a domestic, direct way?

We invest directly in the equity markets via them.

Yes, that is one way to play this positive growth story.

The other way is to the currency so you do it through the nondeliverable forward market.

Yesterday reached a 20 year high , so we're seeing some of those relative growth stories playing out in a better equity market any better currency.

Talk to me about european earnings season.

We are in full swing.

A lot of companies have been disappointing, but it is the company's that are doing great.

Take a step back and look at the valuation story.

And you get into individual sectors and names.

You're right, the numbers have been disappointing a little bit.

I think we were all hopeful that companies would give us forward guidance and say things are getting better.

It looks much flatter.

It is just that anemic growth story playing out in the equity market.

It has been a lot of disappointing, i think sectors like pharmaceuticals were reasonably constructible.

We're a bit more negative around utilities and the consequences of the crisis and governments need to raise more taxes.

Reversing that play out.

-- we are seeing that play out.

The bigger picture is look,

This text has been automatically generated. It may not be 100% accurate.


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