Chinese economy will not collapse: Mirae Asset

Its forex reserves of $2.3 trillion is quite substantial, says its CIO Gopal Agarwal

Amid deep cuts in global stock indices over the last few weeks on the back of fear emanating from China, chief investment officer (CIO) of Mirae Asset Management (India) says China will not go bust.

“China has a $2.3 trillion as forex reserves, which is quite substantial. It gives us a conviction that China will not collapse," said Gopal Agarwal, CIO of Mirae Asset (India).

He added that corporate growth is a problem as they are most leveraged. “However, there will not be any material impact on China’s consumption as household savings rate is 50% in China,” he added.

Chinese yuan can see 3-5% depreciation from here on, he said. “I see Yuan to trade in a band with a gradual depreciation of 3-5%. Further, there can’t be a big fall from current levels in the Shanghai index,” said Agarwal.