Howard Marks, Co-Chairman, Oaktree Capital.
Courtesy of David A. Grogan | CNBC
Veteran investor Howard Marks said he was optimistic about China’s economy, but warned that the country’s growth targets remain a significant challenge.
“I’m still optimistic about China’s long-term prospects, as long as they do well and as long as they remain constructive with the rest of the world,” said the co-chairman of Oaktree Capital Management.
“Even though the growth rate is going to be higher,” Marcus told CNBC’s Emily Chan on the sidelines of the third Global Financial Leaders Investment Summit hosted by the Hong Kong Monetary Authority. [China] Targeting modest voices compared to its history, this is still well above the average for the rest of the world, and will represent a Herculean challenge.”
China has set a growth target of “around 5%” for 2024, although Bank of America and Citigroup, among others, expect growth in the world’s second-largest economy to remain below 5%.
The World Bank estimates China’s growth rate to be 4.8 percent in 2024, and is expected to slow further to 4.3 percent next year, despite recent slate measures to boost the economy. Chinese authorities have extended the stimulus rollout since late September.
The World Bank cited China’s slowing consumer spending, struggling property market and growing population as key concerns for the world’s second-largest economy.
“You can’t consistently generate economic growth through stimulus,” Marx said. have been,” Marks said, adding that he hoped China would be able to. To meet the challenges.
Earlier this month, China unveiled a five-year plan worth 10 trillion yuan ($1.4 trillion) to address local government debt problems, while signaling additional economic support next year. will go This comes after Donald Trump’s 2024 presidential victory has raised concerns over rising tariffs on Chinese exports.
The People’s Bank of China cut the reserve requirement ratio (RRR) by 50 basis points in September to inject more liquidity into the Chinese economy, now requiring banks to hold less cash. That same month, President Xi Jinping led a meeting stressing the need to increase fiscal and monetary support while working to stem the downturn in the real estate market.
“But when there’s a lot of stimulus in an area like property, and you build a lot of buildings, then you go through an adjustment period,” Marks said.
